[Click e-Stock] "Hyundai Department Store Expected to Maintain Solid Performance in Second Half... Target Price Raised"

Target Price Raised from 90,000 Won to 100,000 Won

On June 25, Korea Investment & Securities raised its target price for Hyundai Department Store from 90,000 won to 100,000 won, expecting the stock price to maintain a solid performance in the second half of the year. The investment opinion remains 'Buy'.

Kim Myungjoo, a researcher at Korea Investment & Securities, stated, "The proportion of foreign sales in Hyundai Department Store's total sales stands at around 5-6%, the highest among department store companies. Given last year's low base, inbound demand is highly likely to continue increasing this year, which is also positive for Hyundai Department Store's performance. Thanks to a favorable industry environment, the company's stock price is expected to maintain a solid trend in the second half of the year as well."

Hyundai Department Store's earnings for the second quarter of this year are expected to meet market expectations. Kim said, "On a consolidated basis, Hyundai Department Store's second-quarter sales are projected to reach 1.141 trillion won, up 11.4% year-on-year, with operating profit rising 96.8% to 84.3 billion won, in line with market expectations for operating profit. After a sluggish performance in April, the department store segment has shown improvement since May."

The second half of the year is expected to be better than the first half. Kim explained, "Outbound travel increased rapidly in the second half of last year, creating a gap in domestic consumption and leading to weak results for domestic distribution companies, including department stores. Hyundai Department Store's department store earnings in the third and fourth quarters of last year were also sluggish, resulting in a low base for the second half of this year. The supplementary budget planned by the government for the second half is expected to have a positive indirect impact on sales recovery in the department store channel, so the improvement in Hyundai Department Store's department store performance in the second half is highly visible." He added, "Recently, as those born between 1991 and 1995 are entering the prime marriage age, the number of marriages and newborns is increasing. Along with the supplementary budget, the rise in the number of newborns will also have a positive effect on inflows into the distribution sector."