[Click e-Stock] "Emart’s Earnings Improvement Accelerates...‘Buy’ Rating Maintained"

On January 6, NH Investment & Securities maintained its "Buy" investment rating and a target price of 110,000 won for Emart, expecting the company’s earnings improvement to accelerate in earnest.

Joo Younghoon, a researcher at NH Investment & Securities, stated, "In 2025, the offline business succeeded in rebounding its performance thanks to reduced selling and administrative expenses and the effects of integrated purchasing. However, operating losses widened for both SSG.COM and Gmarket in the online segment." He added, "Concerns over online performance are also expected to ease in 2026."

Joo first pointed out that, as a result of the approval for the business combination review between Gmarket and Aliexpress Korea, Gmarket has been excluded from consolidated financial results since November of last year. He also mentioned that SSG.COM saw its daily active users (DAU) increase by 18% year-on-year in December, following the Coupang personal information leak incident. He projected, "With the upcoming launch of the new membership program 'SSG Seven Club,' a turnaround in performance is likely." Accordingly, the "Buy" rating and 110,000 won target price were maintained. As of the previous day's closing, Emart's stock price stood at 82,500 won per share.

For the fourth quarter of last year, Emart’s consolidated sales and operating loss are estimated at 7.4015 trillion won and 136.9 billion won, respectively. Compared to a year earlier, sales increased by 2.1%, and operating profit turned positive. The same-store sales growth rate for discount stores is estimated at around +3%.

Joo explained, "With the positive impact of the difference in the timing of the Chuseok holiday being reflected, sales growth is expected for the first time in a while," adding, "Given that cost reductions have already been achieved, profitability is also likely to improve significantly." He continued, "Traders and specialty stores are also expected to maintain their earnings improvement trend, thanks to the Chuseok effect and improved cost structures," and noted, "Although there remains some uncertainty in the performance of certain subsidiaries such as Shinsegae Construction, the exclusion of Gmarket’s operating loss from consolidated results means that, on a combined subsidiary basis, performance is not expected to deteriorate year-on-year."

Emart was established in May 2011 through a spin-off of Shinsegae’s hypermarket division. Its subsidiaries include Shinsegae Chosun Hotel, Shinsegae Food, Emart Everyday, Emart24, and Shinsegae Property, among others.