[Click eStock] "GS Retail, Convenience Store Sales Expected to Rise with Increase in Students Attending School"

[Asia Economy Reporter Oh Ju-yeon] Daishin Securities analyzed on the 28th that GS Retail's convenience store sales will increase as the number of students attending school rises in the future. Since September, with the increase in outing visitors, the convenience store sales growth rate in the fourth quarter has partially recovered, and with up to two-thirds of students able to attend school from October, the fourth-quarter sales recovery is expected to be even more significant.

GS Retail's total sales and operating profit in the third quarter of this year were 2.3488 trillion KRW and 79 billion KRW respectively, down 1% and 13% compared to the same period last year.

Researcher Yoo Jeong-hyun of Daishin Securities analyzed, "In the case of convenience stores, due to the impact of COVID-19, students' attendance was not normal, and the unprecedented long rainy season in August reduced summer peak season product sales, resulting in a -3% same-store sales growth rate. Additionally, support payments for stores with reduced operating hours caused convenience store operating profit to decrease by 9%."

Furthermore, the supermarket segment recorded an operating profit of 15.4 billion KRW, an increase of 13 billion KRW compared to the same period last year, due to the effects of chain-operation work, while the hotel segment turned to a loss as the average occupancy rate remained in the 40% range due to a sharp decline in business demand.

Daishin Securities focused on the increase in students attending school next year. Researcher Yoo stated, "The first semester this year started with online classes in early April, and offline attendance days averaged only 1-2 days per week, so sales in March and April were most severely affected, resulting in poor annual same-store sales growth. Considering that the number of school attendance days cannot decrease further next year compared to this year, the performance improvement in 2021 is very clear."

Accordingly, the investment opinion 'Buy' was maintained, and the target stock price was raised by 13% from the previous to 54,000 KRW.