Will Summer Surplus Funds Lead to Increased Home Appliance Spending? ... Lotte Hi-Mart's Expectations Rise

[Asia Economy Reporter Oh Ju-yeon] NH Investment & Securities analyzed that the payment of emergency disaster relief funds worth 14 trillion KRW, the possibility of converting overseas consumption amounting to 34 trillion KRW into domestic spending, and the increase in summer discretionary funds for middle-class and above households are fueling expectations for expanded home appliance sales within Lotte Hi-Mart. Accordingly, the investment opinion was maintained as 'Buy' and the target price was raised from the previous 30,000 KRW to 35,000 KRW.

NH Investment & Securities evaluated that Lotte Hi-Mart's separate basis sales in the first quarter of this year reached 925.3 billion KRW, and operating profit was 19.5 billion KRW, exceeding market consensus.

Although the sales growth rate in the second quarter is still slightly down compared to the same period last year, sales recovery centered on white goods is prominent, and the possibility of air conditioner sales recovery remains open, so expectations are still warranted.

Lee Ji-young, a researcher at NH Investment & Securities, said, "The government is currently providing emergency disaster relief funds of about 14 trillion KRW to all domestic households, and there is a high possibility that overseas consumption, which amounts to about 34 trillion KRW annually, will be converted domestically."

The emergency disaster relief funds must be used by the end of August, and since overseas travel is also largely concentrated in the summer, discretionary funds for middle-class and above households are expected to increase during the summer season.

The researcher diagnosed, "Accordingly, demand is increasing due to the recent increase in time spent at home, and sales of home appliances, which have price merits due to the government's high-efficiency appliance rebate program, are likely to rise."

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