[Click e-Stock] "Hyundai Department Store Remains Resilient Despite Temporary Duty-Free Losses"

Shinyoung Securities raised its target price for Hyundai Department Store from 73,000 won to 88,000 won on July 9, stating that the company has maintained solid performance despite the fact that a full economic recovery has not yet materialized, and that it is expected to benefit further from an improved environment in the second half of the year. The investment opinion remains 'Buy'.

Hyundai Department Store's consolidated gross sales and operating profit for the second quarter are estimated at 2.5682 trillion won and 77.9 billion won, respectively, up 3.7% and 81.7% year-on-year. These estimates reflect one-off costs related to the withdrawal from the Dongdaemun duty-free store and the reversal of provisions from the Zinus anti-dumping lawsuit.

The second-quarter same-store sales growth rate for Hyundai Department Store is expected to show a slight decline due to overall sluggish consumer sentiment. However, Seo Jungyeon, a researcher at Shinyoung Securities, interpreted the recovery in the fashion segment since May as a positive sign. She noted that while the closure of the D-Cube branch at the end of June may have a temporary impact on sales, this effect is likely to be offset starting in July by the opening of the Connect Hyundai Cheongju branch.

Seo added, "Although department store sales have remained robust, profitability improvement has been limited in the first half due to temporary expenses from renovations and closures. The company is expected to benefit both directly and indirectly if consumption coupons are distributed and the number of Chinese tourists increases, as it operates both department stores and duty-free shops."