[Click eStock] "Hyundai Home Shopping, Stable 4Q Performance Compared to Competitors"

[Asia Economy Reporter Lee Jung-yoon] IBK Investment & Securities on the 31st issued a buy rating and a target price of 77,000 KRW for Hyundai Home Shopping.

Hyundai Home Shopping's fourth-quarter performance last year is expected to be relatively stable compared to competitors. On a consolidated basis, the fourth-quarter transaction volume is estimated to have increased by 0.2% year-on-year to 1.3024 trillion KRW, and operating profit is estimated to have risen by 13.8% to 31.3 billion KRW.

Nam Seong-hyun, a researcher at IBK Investment & Securities, said, "Growth was driven by the sales of small and medium-sized household products in home shopping and increased demand for high-end products, along with an expanded contribution from Hyundai Rental Care's return to profitability." He added, "Cost stabilization at Hyundai L&C and increased demand for windows and doors are also expected." However, he noted, "In home shopping, operating profit is estimated to decline by 18.9% year-on-year to 28 billion KRW due to a margin decrease caused by a relatively negative product mix effect."

This year, Hyundai Home Shopping's operating performance is expected to decrease due to the sale of Hyundai Rental Care. However, since Hyundai Rental Care has continuously recorded losses except for last year, the uncertainty has been resolved. Researcher Nam also stated, "Home shopping growth is being maintained based on margin improvement from cost stabilization at Hyundai L&C and live shopping," adding, "There is a high possibility that the role of the business division will be strengthened following the restructuring of the group's governance in the future."