Korea Stock Market Insights

Tag: Hanil Feed

  • Hanil Feed Signs 4-Year Supply Contract with Seoul Milk: Investment Opportunity Analysis

    Hanil Feed Signs 4-Year Supply Contract with Seoul Milk: Investment Opportunity Analysis 대표 차트 이미지

    1. What Happened?

    Hanil Feed Co., Ltd. signed a 4-year feed supply contract with Seoul Milk Cooperative on August 28, 2025. The contract volume is set at 18,000 tons per month, a 35% increase compared to the average of the past four years. This is expected to contribute significantly to the sales stability of Hanil Feed’s feed division.

    2. Why is it Important?

    The feed division accounts for approximately 35% of Hanil Feed’s total sales and has recently faced challenges due to intensifying competition and price declines. This contract offers an opportunity to overcome these difficulties and secure growth momentum by securing a stable sales outlet. In particular, the close cooperative relationship with Seoul Milk Cooperative is expected to positively impact the brand value of ‘Magic Feed’.

    3. So, What’s Next?

    • Positive Effects: Secured sales stability, driving external growth, enhancing brand credibility, potential for profitability improvement
    • Risk Factors: Uncertainty in profitability due to fluctuations in raw material prices and exchange rates, increased transportation and production costs, potential changes in actual supply volume

    The contract price is set at 548.0 KRW/KG but is subject to adjustments based on fluctuations in raw material prices and exchange rates. Therefore, investors should closely monitor raw material market trends and exchange rate fluctuations.

    4. What Should Investors Do?

    While this contract is expected to provide positive momentum for Hanil Feed’s mid-to-long-term growth, potential risk factors also exist. Investors should make prudent investment decisions by comprehensively considering these factors.

    What are the key details of this contract?

    Hanil Feed signed a contract to supply 18,000 tons of feed per month to Seoul Milk Cooperative for four years. This represents a 35% increase compared to the average supply volume over the past four years.

    Will this contract positively impact Hanil Feed?

    Yes, positive effects such as secured sales stability, external growth, and enhanced brand credibility are expected. However, attention should be paid to risk factors such as raw material price fluctuations and exchange rate changes.

    What should investors be aware of?

    Investors should carefully monitor raw material prices, exchange rate volatility, and market competition and make investment decisions by comprehensively considering these factors.

    Hanil Feed Signs 4-Year Supply Contract with Seoul Milk: Investment Opportunity Analysis 관련 이미지
    Hanil Feed Signs 4-Year Supply Contract with Seoul Milk: Investment Opportunity Analysis 관련 이미지

  • Hanil Feed (005860) H1 2025 Earnings Analysis: Revenue Growth, but Profitability Declines. What’s Next?

    1. Hanil Feed H1 2025 Performance: What Happened?

    Hanil Feed reported KRW 107.8 billion in revenue for H1 2025, showing growth compared to the same period last year. However, operating profit decreased to KRW 1 billion, while net profit, though improved at KRW 1.7 billion, was significantly influenced by non-operating income.

    2. Analyzing the Profitability Decline: Why These Results?

    Despite revenue growth, the decline in profitability is primarily attributed to falling prices in the feed segment and weak demand in the meat distribution segment. The feed segment struggled to pass on increased raw material costs, while the meat distribution segment faced intensified market competition.

    3. Key Insights for Investors: What to Do?

    • Investment Points:
      • Stable revenue from the feed segment
      • Growth potential in the meat distribution segment
      • Improved consolidated financial health
    • Risk Factors:
      • Declining profitability
      • Cost pressures (exchange rate, raw material prices)
      • Market uncertainty
      • Dependence on Seoul Milk Cooperative
      • High debt-to-equity ratio (standalone basis)

    4. Future Outlook and Investment Strategy: What Actions Should Investors Take?

    The current investment recommendation is ‘Neutral’. Investors should closely monitor the company’s ability to improve profitability through price increases in the feed segment, new sales channels in the meat distribution segment, and cost reduction efforts. Furthermore, exchange rate and raw material price volatility, as well as contract renewal with Seoul Milk Cooperative, are crucial factors to consider. A thorough analysis of the company’s future strategies and market conditions is essential before making investment decisions.

    Frequently Asked Questions

    Q: What are Hanil Feed’s main businesses?

    A: Hanil Feed manufactures and sells animal feed and operates a meat distribution business.

    Q: What are the key takeaways from the H1 2025 earnings report?

    A: Revenue increased, but operating profit declined due to falling feed prices and weak demand in the meat distribution segment.

    Q: What should investors consider when investing in Hanil Feed?

    A: Key considerations include declining profitability, cost pressures, market uncertainty, dependence on Seoul Milk Cooperative, and the company’s debt-to-equity ratio (standalone basis).