[Click eStock] "Hyundai Department Store, Fashion Sales Are Key... Target Price Down"

Slight Downgrade of Earnings Estimates

Hana Securities announced on the 15th that it is slightly lowering its earnings estimates for Hyundai Department Store. It maintained a 'Buy' investment rating and lowered the target price from 65,000 KRW to 60,000 KRW.

Seo Hyun-jung, a researcher at Hana Securities, said, "We expect the consolidated sales for the third quarter to decrease by 3% year-on-year to 2.4488 trillion KRW, and operating profit to decline by 9% to 67 billion KRW, in line with market expectations."

Researcher Seo explained, "The key to the earnings is the department store, and if only the fashion category sales rebound in the fourth quarter, the earnings improvement trend will improve due to the mix improvement effect."

Until the first half of the year, a deficit of 9 billion KRW was recorded in duty-free, and a deficit of 30 billion KRW in Jinus alone, significantly reducing the visibility of profits despite earnings growth in the department store. Researcher Seo analyzed, "Both sales and profits of Jinus have started to turn to growth, and the deficit in duty-free shops is not expanding," adding, "As the uncertainties in earnings factors are gradually resolved, Hyundai Department Store has shifted to an earnings growth trend from the fourth quarter."

Researcher Seo added, "Although we slightly lowered the earnings estimates and target price, buying at the low point is valid for the long term."