Lotte Wellfood (280360) 🔎 In-depth
KOSPI · Price as of 2026-08-06 · Updated 2026-08-09
Lotte Wellfood was formed by merging the former Lotte Confectionery and Lotte Foods. It is a diversified food company whose four legs each account for roughly 20% of total revenue: dry confectionery (Pepero, Crunky), frozen treats (World Cone, Jaws Bar), edible oils and processed meat, and an overseas business centred on India. The company is building up its overseas mix under a 'One India' framework, having announced Pepero's first overseas production line and an ice-cream plant expansion as part of new capacity investment in its Indian production base. Its Q1 2026 preliminary results, released on May 8, confirmed a sharp rebound in operating profit, and it has kept its shareholder-return stance with a ₩3,300 per-share dividend. The notable point right now is that raw-material cost pressure appears to have passed its peak, more than doubling Q1 operating profit, while India offers a growth stage and the P/B of 0.43x signals undervaluation. On the other hand, margins themselves are thin, so a renewed swing in raw materials or the exchange rate would slow the recovery, and interest costs on net debt of around ₩707.3 billion plus cash outflows tied to growth investment continue.
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30-second brief
Pulled directly from the computed values below — not a separately written opinion.
What do the SourceComputedEstimateReading tags mean?
Source filings and exchange data · Computed calculated from public data · Estimate our own unverified projection · Reading drafted automatically, then rule-checked. See AI & Automation.
Core valuation metric
This stock's effective sub-sector is “Food & Beverage” (Retail, Consumer Goods & Food), a type typically read first through P/E.
Food and beverage sits close to daily necessities, so demand is fairly steady and earnings tend to be stable. The less a business's profits fluctuate, the more directly you can weigh them against the price, which makes trailing P/E — based on earnings already realized — the first metric.
Price against earnings alone becomes unstable when earnings swing. Reading it together with price against assets helps gauge the downside.
This note explains how each sector is typically valued and is educational context only, not investment advice.
At-a-glance assessment financial health · growth · profitability · valuation
- Revenue rose 4.2% year over year, and the pace is quickening (3-year trend: mixed).
- Most recent quarter (Q1 2026) revenue was 5.3% higher than a year earlier.
- ROE is 3.0% (controlling-interest basis). It is below the sector average.
- Operating margin is 3.0%.
- A sector-metric and in-depth research verdict — see “Valuation vs peers” below for the basis.
Ownership & governance As of 2025-12-31
Largest shareholder Lotte Corporation 48.13% (corporate)
Controlling bloc incl. related parties 68.55%
With the controlling bloc holding 69%, control is very secure but the free float is thin.
🔎 In-depth analysis Reading
Lotte Wellfood was formed by merging the former Lotte Confectionery and Lotte Foods, and it makes and sells the snacks, ice cream and processed foods you commonly see in supermarkets. Revenue breaks down into four legs. Dry confectionery such as biscuits and chocolate (Pepero, Xylitol, Crunky); frozen treats such as ice cream (World Cone, Seolleim, Jaws Bar); edible oils and processed meat (products such as Lospam); and an overseas business centred on India. Each segment holds roughly 20% of total revenue in a fairly even split, so the company is not overly reliant on any single product. In recent years it has shifted weight toward growing its Indian entity, producing and selling Pepero and ice cream locally.
The latest close is ₩104,000 and the market capitalization is ₩957.3 billion. The price sits above its 20-day moving average (₩102,485) and below its 60-day moving average (₩105,617). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 52.4, a neutral level. The one-month change is -2.8%, the three-month change is -11.6%, and the position relative to the 52-week high is -23.3%. Relative strength versus the KOSPI is 23 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 22% of all stocks. Over the past three months it outpaced the index by 3.5%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
The P/E ratio (how many years of profit the price represents) is 13.24x, around the middle of the market. The P/B (how many times book net assets the price represents) is 0.43x, trading below half of net assets, so it is valued cheaply relative to asset value. Profitability, however, is weak. ROE (how much is earned on equity in a year) is 3.3%, the operating margin is 2.6% and the net margin is 1.7% - all thin. The debt ratio (debt against equity) is 104%, not a heavy burden, but the interest coverage ratio of 1.69x means interest is heavy relative to operating profit earned. Looking at EV metrics alongside this changes the picture somewhat. With net debt (total borrowings minus cash) of about ₩707.3 billion, EV/EBIT (enterprise value divided by operating profit, a debt-inclusive version of the P/E) is 15x, a touch higher than the P/E. Last year's heavy capital expenditure meant free cash flow (FCF, the cash actually kept in hand) was negative, which should be seen as the result of concentrated growth investment such as the new Indian plant. The dividend yield is 3.25% (₩3,300 per share), keeping the payout ratio around 40%.
Revenue rose steadily over five years to a record ₩4.22 trillion last year (+4.3% year-on-year). The problem was profit. Last year's operating profit fell more than 30% to ₩109.5 billion, as surging prices for cocoa, oils and other raw materials squeezed margins. Net profit also fell 15% to ₩72.3 billion. This year the direction changed. Q1 2026 operating profit jumped 118% year-on-year to ₩35.8 billion, a sign that profitability is recovering quickly as raw-material pressure eases and price increases feed through. Q1 net profit (₩16.7 billion) was down year-on-year, but this reflects a high base in the prior-year Q1 combined with interest and non-operating burdens. The snack and ice-cream business peaks in the summer (Q2-Q3), making Q1 the seasonally weakest quarter. If the operating-profit recovery continues through the remaining quarters, there is strong room for full-year profit to improve on last year. Reflecting this recovery trajectory, the price multiple on this year's expected profit is lower than on last year's results. In other words, the P/E of 12.9x on last year's numbers comes close to overstating the real picture of a profit cycle bottoming and turning up.
The most eye-catching item is the expansion of Indian investment. The company announced new capacity investment in its Indian production base through an electronic disclosure, centred on Pepero's first overseas production line and an ice-cream plant expansion. The strategy is to integrate the Indian entities under a 'One India' framework and raise the overseas revenue mix by expanding local production. On the earnings side, the Q1 preliminary results disclosure on May 8 confirmed a sharp rebound in operating profit. In addition, the company has held several investor presentations (IR) to keep communicating with investors, and maintains its shareholder-return stance through the dividend (₩3,300 per share).
The point to watch for this company is 'how long the profitability recovery lasts.' The strong conditions are clear. As raw-material cost pressure passed its peak, Q1 operating profit more than doubled this year. Brand power is solid and revenue keeps setting records year after year. It has also secured India as a growth stage. Relative to assets it is valued cheaply at a P/B of 0.43x. On the other hand, there are cautions. Because margins themselves are thin, a renewed swing in raw-material prices or the exchange rate could slow the recovery. With net debt in the ₩700 billion range, interest costs eat into net profit, and growth investment means cash outflows continue for some time. In sum, in a phase of stable raw materials and Indian growth it reads as an undervalued recovery play climbing out of last year's slump, while in a phase where input costs and interest rates turn adverse again, thin margins and interest burden hold it back.
🔎 Valuation vs peers Undervalued
Comparison centred on large domestic food companies that combine snacks, ice cream and diversified foods.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Orion | 14.00x | 1.37x | 10.35% |
| CJ CheilJedang | — | 0.41x | -6.81% |
Against Orion, its closest peer, Lotte Wellfood's P/E (12.9x) and P/B (0.43x) are clearly lower. Orion trades at a P/E of 14.4x and a P/B of 1.44x with ROE in the low teens, commanding a premium for its superior profitability. Part of why Lotte Wellfood is valued lower - its thin margins and heavy interest burden - does explain the gap to some degree. But the key is that last year's profit hit bottom on surging raw-material prices. A P/E calculated on last year's results uses a figure from a moment when profit was depressed, so it looks more expensive than it really is. Reflecting the more-than-doubling of Q1 operating profit, the multiple on expected profit falls further. Weighing asset value (P/B 0.43x) together with recovering profit, the current price is judged to be in undervalued territory.
Price history Close · MA20 · MA60
The latest close is ₩104,000 and the market capitalization is ₩957.3 billion. The price sits above its 20-day moving average (₩102,485) and below its 60-day moving average (₩105,617). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 52.4, a neutral level. The one-month change is -2.8%, the three-month change is -11.6%, and the position relative to the 52-week high is -23.3%. Relative strength versus the KOSPI is 23 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 22% of all stocks. Over the past three months it outpaced the index by 3.5%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M +3.53% / 6M -31.36% / 12M -56.86%
Key metrics Computed vs sector median
Valuation
The P/E of 13.24x is above the sector median (8.93x). The P/B of 0.43x is below the sector median (0.56x). That said, this P/E is based on last year's (trailing) results. With recent quarterly earnings up sharply, the trailing P/E can look higher than it really is, so a precise read is best done on this year's expected (forward) earnings.
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Intrinsic value (DCF estimate) Estimate
Model output — not a price target. This is what the formula returns under the assumptions below, not a view on where the share price should go.
DCF (discounted cash flow) estimate — discount rate 9.2%, initial growth 10.0%→terminal 2.0%, 10-yr forecast, earnings-based. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 3.0%, below the sector average (4.0%). The operating margin is 3.0%. The debt ratio is 106.8%, so the financial structure is moderate.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $2.9B | $2.8B | $3.0B | +4.25% ↑ faster |
| Operating profit | $124.4M | $110.4M | $76.9M | -30.29% ↓ slower |
| Net profit | $49.6M | $59.4M | $50.8M | -14.57% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $1.5B | $2.3B | $2.9B | $2.8B | $3.0B |
| Operating profit | $76.2M | $79.0M | $124.4M | $110.4M | $76.9M |
| Net profit | $25.5M | $30.8M | $49.6M | $59.4M | $50.8M |
| Revenue CAGR | 4-yr avg 18.40% | ||||
Revenue rose 4.2% year over year (2023 ₩4.1 trillion → 2024 ₩4.0 trillion → 2025 ₩4.2 trillion), and the three-year trend is 'mixed'. The pace of growth also quickened from the prior year. Operating profit fell 30.3% year over year. The decline widened. Over the 5 years on record, revenue compound annual growth (CAGR) is 18.4%. The two-year revenue CAGR is 1.8%. In the most recent quarter (Q1 2026), revenue was 5.3% higher than the same period a year earlier.
Latest quarterly results Source Q1 2026 · vs year-ago
Technical indicators Computed
What stands out
- The dividend yield, at 3.2%, is on the high side.
Points to watch
- The price is high versus peers, so expectations already appear priced in.
Recent news & events searched · sourced
- 2026-04-01FilingDecision on new capacity investment in the Indian production base (large-scale investment centred on Pepero's overseas production line and an ice-cream plant expansion)Over the medium term, a growth axis that raises overseas production capacity and the revenue mix. In the short term, capital expenditure means continued cash outflow and a burden on free cash flow. Source
- 2026-05-08EarningsQ1 2026 consolidated preliminary results disclosure - revenue ₩1,027.3 billion (+5.4%), operating profit ₩35.8 billion (+118% year-on-year), net profit ₩16.7 billionOperating profit rebounded sharply on easing raw-material pressure and price effects, a sign of recovering profitability. Net profit fell on base and interest burdens. Source
- 2026-05-20IRInvestor presentation (IR) held - communicating Q1 results and global strategy including IndiaEarnings and strategy communication for investors. A window to confirm direction in the recovery phase. Source
- 2026-04-07DividendShareholder-return stance maintained - ₩3,300 per-share dividend (payout ratio around 40%)A dividend yield of about 3.25% that partly supports the downside. Source
Figure cross-check computed ↔ external
Recent filings Source
- 2026-05-29Large-business-group status disclosure
- 2026-05-29Corporate governance report
- 2026-05-20Disclosure
- 2026-05-14PeriodicQuarterly report
- 2026-05-08Disclosure
- 2026-05-08EarningsFair-disclosure notice
- 2026-05-04Disclosure
- 2026-04-28Material-fact report (amended)
- 2026-04-07OwnershipLargest-shareholder ownership change report
- 2026-04-07OwnershipOfficers'/major-shareholders' holdings report
- 2026-04-01Amended filing
- 2026-03-27OwnershipLargest-shareholder ownership change report
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.