[Click eStock] E-commerce Smiles... Hyundai Home Shopping Faces Challenges in Q2 Too

1Q Operating Profit Down 16% YoY... Similar Trend Expected in Q2

[Asia Economy Reporter Minwoo Lee] There are forecasts that Hyundai Home Shopping's poor performance may continue into the second quarter. Unlike the high-growth e-commerce sector, the home shopping industry continues to struggle. There are calls for structural breakthroughs to be made.

On the 12th, Hyundai Motor Securities pointed this out regarding Hyundai Home Shopping. In the first quarter of this year, Hyundai Home Shopping recorded separate 기준 transaction volume of 1.008 trillion KRW, sales of 256 billion KRW, and operating profit of 33.7 billion KRW. Transaction volume and sales rose by 3.2% and 0.6% respectively compared to the same period last year, but operating profit fell by 15.8%. Jongryul Park, a researcher at Hyundai Motor Securities, explained, "Operating profit fell significantly short of initial forecasts due to a weakening gross profit margin and the reflection of last year's one-time gain (58 billion KRW VAT refund). Excluding the one-time gain effect, operating profit decreased by 0.4% compared to the same period last year."

The problem is that this trend may continue for the time being. Reflecting the consumption downturn, the transaction volume growth rate for this year (2.9%) is inevitably slower than last year's (5.2%). The slowdown in external growth is expected to negatively impact the operating profit growth rate due to increased fixed cost burdens. However, there is also analysis that the effect of reduced transmission fees may provide some defense.

In the second quarter, separate 기준 transaction volume is expected to be 1.007 trillion KRW, sales 263 billion KRW, and operating profit 45.2 billion KRW. Compared to the same period last year, transaction volume and sales are expected to rise by 2.7% each, but operating profit is expected to continue to decline by 3.4%. Annual operating profit for this year is forecasted to be 139.2 billion KRW, down 7.5% from last year.

Accordingly, Hyundai Motor Securities maintained a 'Buy' investment opinion on Hyundai Home Shopping but lowered the target stock price from 110,000 KRW to 95,000 KRW. The closing price on the previous trading day was 69,800 KRW. Researcher Park pointed out, "It is well known that the company's stock price level is very undervalued, but the reality is that there is a lack of momentum to attract investors' favor. Efforts to maximize shareholder value through dividends, profit buybacks, and other means are necessary."

This content was produced with the assistance of AI translation services.