Nara Cellar
The author is an analyst for NH Investment & Securities. He can be reached at kyeongkeun.kang@nhqv.com -- Ed.
Nara Cellar is the fourth largest wine importer/distributor in Korea. It has established a balanced portfolio of wine from different regions. Through the establishment of an advanced winery network system, the firm has built exclusive partnerships.
Wine importer/distributor
Established in 1997, Nara Cellar is the fourth largest wine importer/distributor in Korea in terms of sales. The firm has established a balanced portfolio, with 2022 sales breaking down by wine region as US 39%, France 20%, Chile 20%, Italy 7%, and other 14%.
Wine accounts for around 14% of the domestic alcoholic beverage market, with a total value of around W1.7tn as of 2022. Wine consumption in Korea reached 1.9 bottles/capita in 2022, significantly lower than that in other countries with GDP over US$30,000. Of note, OECD average wine consumption recorded 23 bottles/capita. This suggests ample room for growth. When liquor tax laws are revised (fixed rate → volume-based) and sales of liquor through online channels are permitted, further market growth is expected.
Advanced winery network system
Nara Cellar’s competitiveness lies in its advanced winery network system. While the general import industry is based on legal contracts, the wine industry is often operated on a family-oriented basis, and business is sustained based on relationships with wineries. The company boasts relationships of 10-years or longer with 38% of its winery clients. Also, the firm has secured exclusive supply rights to 22 products from 10 brands, including Montes.
In 2023, sales are estimated at W123.7bn (+15.4% y-y) and OP at W13.6bn (+14.0% y-y; OPM of 11.0%). Based on its IPO price, the firm’s 2023 P/E is predicted at 12.3~14.7x, and its free-floating rate after listing should come to 26.88%.