[Click eStock] "Hyundai Home Shopping, Steady Q2... Q3 Operating Profit Expected to Rise 29%"

[Asia Economy Reporter Park Jihwan] Shinhan Financial Investment maintained its buy rating and target price of 90,000 KRW for Hyundai Home Shopping, stating that the second-quarter earnings met market expectations.

Heejin Park, a researcher at Shinhan Financial Investment, explained, "Hyundai Home Shopping's consolidated operating profit for the second quarter was 43.1 billion KRW, a 5.2% decrease compared to the previous year, in line with the market estimate of 42.5 billion KRW." Looking at profits by segment, home shopping recorded 43.5 billion KRW, Rental Care 5.7 billion KRW, and L&C (building materials) 11.5 billion KRW.

In the case of Rental Care, although increased costs due to advertising and promotional activities were disappointing, sales grew strongly by 57.3% year-on-year, maintaining a favorable growth trend. The L&C segment delivered a surprise; while sales slightly declined year-on-year as expected, operating profit increased by more than 200% due to improvements in cost ratio and expense structure.

Hyundai Home Shopping's consolidated operating profit for the third quarter is expected to increase by 28.6% year-on-year. Home shopping operating profit is forecasted to rise by 12.4% from last year to 30.1 billion KRW. Third-quarter sales in the L&C segment are expected to decline by 1.6% due to continued weakness in the construction market, but profits are projected to continue improving following the previous quarter.

Researcher Heejin Park said, "Although growth in home shopping alone has slowed compared to the past, additional growth drivers have been secured through Rental Care," adding, "Operating losses are being offset through the L&C segment."

He added, "The attractiveness of the valuation is also sufficient, with net cash holdings at about half of the market capitalization and a PER valuation of only about five times."

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