[Click eStock] "GS Home Shopping, Strong Q3 Performance Thanks to Sales Growth"

Yuanta Securities Issues 'Buy' Investment Rating and Sets Target Price at 189,000 KRW... Closing Price on 28th at 144,700 KRW

[Asia Economy Reporter Kum Boryeong] An analysis has emerged that GS Home Shopping recorded strong performance driven by growth in third-quarter transaction volume.

According to Yuanta Securities on the 29th, GS Home Shopping's separate third-quarter transaction volume was 1.089 trillion KRW, a 10.2% increase compared to the previous year. Operating profit surged 94.4% to 38.3 billion KRW, significantly exceeding consensus estimates.

Lee Jin-hyeop, a researcher at Yuanta Securities, explained, "The strong performance was driven by the transaction volume growth rate (10.2%). The overall increase in TV viewing time due to the resurgence of COVID-19 and the prolonged rainy season, along with Chuseok, which is usually an off-season but fell in the fourth quarter this year unlike last year, positively impacted GS Home Shopping's growth rate."

The gross profit margin (GPM) improved by 0.7 percentage points year-on-year, showing enhanced profitability. The researcher analyzed, "This was due to reducing the allocation of low-margin intangible products and increasing the allocation of high-margin tangible products."

Although the increase in IPTV transmission fees led to an 8 billion KRW rise in transmission costs compared to the previous year, the leverage effect from high top-line growth resulted in a lower selling and administrative expense ratio than the previous year.

Yuanta Securities gave GS Home Shopping a 'Buy' investment rating with a target price of 189,000 KRW. The closing price on the 28th was 144,700 KRW.