[Click e-Stock] "Hyundai Department Store Expected to Maintain Profit Growth... Target Price Raised"

Target Price Raised from 75,000 Won to 96,000 Won

On August 7, IBK Investment & Securities raised its target price for Hyundai Department Store from 75,000 won to 96,000 won, citing continued profit growth. The investment opinion was maintained at 'Buy'.

Nam Sung-hyun, an analyst at IBK Investment & Securities, stated, "The target price was raised based on revised earnings estimates," and explained, "The target price was calculated by applying a target multiple of 10 times to the expected earnings per share (EPS) of 9,621 won for 2025."

In the second quarter of this year, Hyundai Department Store recorded net sales of 1.0803 trillion won, up 5.5% year-on-year, and operating profit of 86.9 billion won, up 102.8% year-on-year. Nam noted, "Considering that both our estimate and the market consensus for operating profit were around 84 billion won, this result is in line with expectations." He added, "What is encouraging about the second quarter is not just the absolute figures but the qualitative improvements. Despite the costs related to the withdrawal from the Dongdaemun duty-free store and the impact of a weaker exchange rate, operating losses decreased quarter-on-quarter. Even though same-store sales at department stores declined, the overall performance drop was limited, and despite a slowdown in The Hyundai Seoul, profit protection was successful."

Profit growth is also expected to continue in the second half of the year. Nam said, "Although the improvement in consolidated results from Zinus in the second half is likely to be limited, profit growth should continue." He cited several reasons: improved profitability following the withdrawal from the Dongdaemun duty-free store; a possible increase in inbound Chinese tourists; performance growth at The Hyundai Seoul following the strengthening of luxury merchandising; and improved profitability due to the withdrawal from D-Cube (Sindorim)."

IBK Investment & Securities estimates Hyundai Department Store's third-quarter results at net sales of 1.0246 trillion won, down 1.2% year-on-year, and operating profit of 75 billion won, up 16.1% year-on-year.