[Click eStock] "Emart, Q3 Earnings Exceed Market Expectations... Target Price Up 24%"

[Asia Economy Reporter Park Jihwan] Ebest Investment & Securities maintained a 'Buy' rating on Emart on the 12th, stating that its third-quarter performance this year significantly exceeded market expectations, and raised the target price by 23.8% from the previous 160,000 KRW to 210,000 KRW.

Orin Ah, a researcher at Ebest Investment & Securities, said on the day, "Emart's third-quarter consolidated sales increased by 16.7% year-on-year to 5.9077 trillion KRW, and operating profit rose by 30.1% to 151.2 billion KRW, surpassing market expectations." She analyzed that the strong sales of separate subsidiaries due to the holiday effect, the efficiency improvement of specialty stores, and improvements in some subsidiaries were factors behind the strong performance.

In particular, the significant reduction in losses in the SSG.com division was evaluated as encouraging. The third-quarter same-store sales growth rate for discount stores recorded 2.7%, with food increasing by 8.5% year-on-year and home appliances by 15.7% by category, proving the effect of the strengthened grocery strategy.

Researcher Orin Ah stated, "The third-quarter same-store sales growth rate for Traders was favorable at 18.7%, and specialty stores improved operating losses by 16.1 billion KRW due to restructuring effects," adding, "Among subsidiaries, Emart24 achieved its first quarterly profit, and the SSG.com division's sales increased by 48.6% to 336.8 billion KRW, with operating losses improving by 20.4 billion KRW year-on-year to 3.1 billion KRW."

She said, "To respond to the increasing demand for online grocery shopping, some stores have been selected to be used as PP centers, and construction is currently underway," adding, "With the expansion of capacity, it is expected to secure a competitive advantage in the online grocery market next year."

Researcher Oh emphasized, "The turnaround of Emart's core business is effective, and in light of the growing online grocery market where logistics capacity is becoming important, proactive responses through the store network and PP centers are positive."

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