Ask Warren

JONBUR Research · Update note

Lotte Wellfood · 280360 · Food & Beverage

Lotte Wellfood: Model fair value estimate cut 36% to ₩141,395 per share

Why this report

Written after:

  • Model fair value changeModel estimate of fair value moved -36% (₩219,794 → ₩141,395 per share)Oct 22, 2026

Our model's base fair value estimate for Lotte Wellfood fell 36% to ₩141,395 per share from ₩219,794, with no new company filing behind the change. The estimate is still above the share price, but by a much smaller margin, and the bear case is now zero.

Written Oct 21, 2026 · Data as of Oct 20, 2026 · 0 views

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

XfWATGr/in@

What happened

The only material event is a change in our model output on 2026-10-22. The base estimate moved from ₩219,794 to ₩141,395 per share, a fall of 36%. No filings or other company events were provided to explain it.

The model is still a 5-year discounted cash flow based on trailing figures to H1 2026. The discount rate is now 6.0%, against 7.4% in the previous report. The bear case moved from ₩46,085 to ₩0, and the bull case from ₩527,610 to ₩595,727. The data does not show why the inputs changed, so the exact drivers are not available here.

The share price was ₩122,400 on 2026-10-20, up from ₩121,100 on 2026-10-16. Trailing revenue is ₩4.4T with a 3.7% operating margin, unchanged from the earlier report. Foreign ownership is 13.9%, against 14.0% sixty days ago.

What it changes for the thesis

The previous report described a large food company with growing sales but thin margins and a 0.5x book multiple. That picture is unchanged. Trailing operating margin is 3.7%, ROE is 3.9%, P/B is 0.5 and P/E is 13.2.

What changes is the size of the gap between the model and the market. The earlier report flagged a wide gap to the model estimate, and that gap has narrowed sharply. The business data does not show a deterioration to match, so the shift comes from the model rather than from the company's reported results.

Over the last 20 days foreigners were small net buyers (about ₩1.3B) and institutions were also net buyers (about ₩0.8B), while retail investors were net sellers (about ₩1.8B). Short balance is 0.1%. This is a mild reversal from the foreign selling noted before, but the amounts are small.

What it changes for the valuation

The new base estimate of ₩141,395 per share is a model estimate based on the assumptions shown, not a target. It compares with the previous ₩219,794 and the current price of ₩122,400. The new base is about 15.5% above the price, against roughly 81.5% above in the previous report.

The range is now ₩0 (bear) to ₩595,727 (bull). A bear value of zero and a bull value more than four times the base show that the result is extremely sensitive to the inputs. The range is too wide to say much about where value lies.

Market multiples are little changed: P/E 13.2, P/B 0.5, P/S 0.3 and a dividend yield of 2.7%. Peers in the data show P/E of 10.6 for Orion, 12.7 for Nongshim, 18.0 for Otoki and 18.9 for Samyang Foods. EV/EBITDA is not available.

Closing view

This update reflects a change in the model, not a new development at the company. Reported figures, the price and the multiples are close to what they were in the previous report, yet the model's base estimate is more than a third lower and the bear case has fallen to zero. That suggests the earlier gap to the market was largely a product of assumptions, especially the discount rate and cash flow inputs. The thin margins, low ROE and 0.5x book multiple remain the central facts. The model estimate should be read as a rough, assumption-dependent reference, not a signal.

Model estimate of fair value

Bear
₩0
-100%
Base
₩141,395
+19%
Bull
₩595,727
+402%

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 6%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

Report history

  1. Oct 21, 2026Update noteModel fair value changeLotte Wellfood: Model fair value estimate cut 36% to ₩141,395 per share
  2. Oct 18, 2026InitiationStart of coverage (300 largest)Lotte Wellfood: Thin margins and low book multiple, with a wide gap to the model estimate

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