Korea Consumer & Internet: Changes in coverage

研报英文原文证据摘录

Korea Consumer & Internet: Changes in coverage

Goldman Sachs Korea Consumer & Internet

BGF Retail Co. (282330.KS, Buy)

We are dropping coverage of BGF Retail Co. (282330.KS). Our final estimates and

12-month target price are unchanged, and our final rating on the stock is Buy. This is our

final report on the company.

Our Final View

BGF Retail’s reported results were in line with our positive view in 1Q26, reflecting a

continuing market consolidation context, SSSG recovery, quality-focused store growth,

and better fixed-cost leverage that is tracking ahead of our prior expectations.

Additionally, we view the company’s focus on stricter store-opening standards and

strategic closures as supporting continued share gains and healthier store-level

productivity, rather than growth driven only by store-count expansion (1Q new stores

generated daily sales at 107.5% of existing stores and showed better YoY sales/GP

performance vs. last year’s new-store cohort). In the near term, we expect noise from

2Q logistics disruption-related expenses. Based on the announced franchisee support

plan, we expect a one-off cost to be reflected in 2Q26. Excluding this, we expect

normalized 2Q OP to remain healthy at W80bn+, supported by continued SSSG recovery

and a favorable fixed-cost base. We therefore view the 2Q cost as temporary noise

rather than a change to the 2026 earnings recovery story. Given that the company is the

sole beneficiary of market consolidation and is pivoting towards quality growth, we are

Buy-rated on BGF Retail.

Investment Thesis

BGF Retail is one of the top two convenience store (CVS) players in South Korea along

with GS Retail, positioned #1 in number of CVS stores and #2 in CVS revenue. We are

Buy-rated on BGF Retail.