[Click eStock] "Emart, Stable Performance Expected This Year... Target Price Up"

Target Price Raised from 82,000 KRW to 105,000 KRW

On the 17th, LS Securities raised the target price for Emart from 82,000 KRW to 105,000 KRW, expecting a stable performance flow this year. The investment rating was maintained at 'Buy.'

Orin Ah, a researcher at LS Securities, explained, "The target price increase is due to the upward revision of core business estimates and the exclusion of multiple discount rates resulting from eased competition." He added, "This year, annual operating profit is expected to significantly increase to around 465.4 billion KRW compared to the previous year, due to integrated sourcing, efforts to reduce selling and administrative expenses, and the exclusion of amortization expenses related to the Gmarket Global Corporate Acquisition Price Allocation (PPA)." He further noted, "The industry is somewhat free from tariff impacts, and the operating environment is generally favorable due to eased competition among large discount stores."

Emart's first-quarter performance this year is expected to meet market forecasts. Researcher Oh said, "On a consolidated basis, first-quarter sales are expected to increase by 0.9% year-on-year to 7.2716 trillion KRW, and operating profit is expected to rise by 194% to 138.6 billion KRW, aligning with the raised consensus (average securities firm forecast)." He analyzed, "Although the existing store growth rate for discount stores recorded -0.6%, operating profit is expected to increase by 7.4% to 54.8 billion KRW. The effects of integrated purchasing and personnel cost reductions from last year's voluntary retirement program are expected to play a significant role." Additionally, Traders is estimated to have a first-quarter existing store growth rate of 1.9% and an operating profit margin of 3.5% due to bulk purchase demand caused by high inflation, while Everyday is expected to see a 1.0% existing store growth rate and a 10.9% increase in operating profit on a separate basis to 103.4 billion KRW due to increased local purchase demand.

This year is projected to record stable performance compared to the previous year. Researcher Oh stated, "Core business is expected to improve profitability due to restructuring effects and integrated purchasing, and with the inclusion effect of Everyday, annual operating profit on a separate basis is expected to increase by 118% year-on-year to around 266 billion KRW." He added, "Consolidated subsidiaries are also judged to have passed the worst phase, and this year is expected to show a stable performance flow compared to the previous year."