Ask Warren

JONBUR Research · Update note

Lotte Chilsung Beverage · 005300 · Food & Beverage

Lotte Chilsung Beverage: Model Fair Value Estimate Rises 20% on a Lower Discount Rate

Why this report

Written after:

  • Model fair value changeModel estimate of fair value moved +20% (₩349,990 → ₩420,785 per share)Oct 27, 2026

Our model estimate of fair value for Lotte Chilsung Beverage rose 20.2% to ₩420,785 per share from ₩349,990, while the share price fell to ₩94,900. The change comes from the model's assumptions, not from new company results, so it adds little new evidence about the business.

Written Oct 26, 2026 · Data as of Oct 23, 2026 · 0 views

This is not financial advice. The report does not recommend buying or selling anything.

XfWATGr/in@

What happened

On 2026-10-27 the model estimate moved from ₩349,990 to ₩420,785 per share in the base case, a rise of about 20%. The bear case moved from ₩70,443 to ₩81,097 and the bull case from ₩909,529 to ₩1,155,083. The discount rate used in the model fell from 5.9% to 5.3%. The underlying financial data is still the trailing twelve months to H1 2026, the same period as in the previous report, so the revisions reflect the lower rate and not new earnings. No company filings were attached to this event. The share price closed at ₩94,900 on 2026-10-23, down from ₩98,300 at the time of the previous report, and down 18.3% over one year. It is close to the 52-week low of ₩93,600.

What it changes for the thesis

The previous report described thin and weakening margins, low returns on equity, high leverage and falling foreign ownership, set against a low book multiple, a dividend yield and positive free cash flow. None of that has changed. Trailing operating margin is still 4.5%, ROE 4.3% and liabilities to equity 166.7%. Foreign ownership edged down to 16.4% from 16.7% sixty days ago. The P/B is still 0.6 and the dividend yield is 3.6%. Recent news headlines mention hopes of a Q4 turnaround on better beverage profitability and a weaker won against the dollar. That is a press report, not a company guidance figure, and we cannot verify it from the data here. Nothing in the data changes the view that the next filed results are the key test.

What it changes for the valuation

The model's base case of ₩420,785 is about 4.4 times the share price of ₩94,900. The bear case of ₩81,097 is below the price, and the bull case of ₩1,155,083 is more than twelve times it. The previous report's range was ₩70,443 to ₩909,529 with a base of ₩349,990. The whole range has shifted upward, but its width remains very large. This shows how sensitive a five-year discounted cash flow is to a small change in the discount rate, here 0.6 percentage points. This is a model estimate based on the assumptions shown, not a target. Current multiples are P/E 13.5, P/B 0.6 and P/S 0.2, compared with P/E 14.0 and P/B 0.6 before, so the market-based picture is little changed.

Closing view

The 20% rise in the model estimate reflects a lower discount rate, not an improvement in earnings, margins or cash flow. The business data is the same as in the previous report, and the share price has drifted lower. The wide range, with a bear case still below the market price, means the estimate should be read as a sensitivity illustration rather than a conclusion. The evidence remains mixed: a low book multiple, a 3.6% dividend yield and positive free cash flow sit alongside thin margins, high leverage and a weak share price trend. An earnings release notice was filed on 2026-10-23, and the results themselves will give the next real update on profit.

Model estimate of fair value

Bear
₩81,097
-13%
Base
₩420,785
+349%
Bull
₩1,155,083
+1133%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Base case of the 5-year discounted cash flow model on the stock's Valuation tab (statements TTM to H1 2026; discount rate 5.3%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

Report history

  1. Oct 26, 2026Update noteModel fair value changeLotte Chilsung Beverage: Model Fair Value Estimate Rises 20% on a Lower Discount Rate
  2. Oct 18, 2026InitiationStart of coverage (reader request)Lotte Chilsung Beverage: Thin Margins, Low Book Multiple and a Wide Model Range

Built only from jonbur's own data: prices and investor flows, filed financial statements and filings, and news headlines. Disclosed (filed) data is labelled as such. Written by AI and may contain mistakes.

This is not financial advice. The report does not recommend buying or selling anything.

Source: KRX statistical information