[Click eStock] Hyundai Department Store Target Raised... 1Q Operating Profit Expected

[Asia Economy Reporter Hwang Junho] Kiwoom Securities expects Hyundai Department Store's consolidated operating profit for the first quarter of this year to exceed market expectations, maintaining a buy rating and raising the target price to 120,000 KRW per share on the 26th.

Kiwoom Securities anticipated a strong rebound in demand not only for home appliances, furniture, and luxury goods but also for fashion and accessories. Accordingly, the growth rate of existing department stores (same-store sales) is expected to increase by about 20%. In particular, with the resumption of outdoor activities and the base effect from the previous year overlapping, the same-store sales growth rate for department stores in March is expected to rise to 60%. Despite an increase in fixed costs due to the opening of The Hyundai Seoul store last month, Hyundai Department Store's operating profit for the first quarter is estimated to reach 92.1 billion KRW, showing improved performance compared to the fourth quarter of last year.

Furthermore, Kiwoom Securities forecasts that the increase in department store demand will translate into substantial sales growth. Due to consumption polarization after COVID-19, a booming asset market (stocks and real estate), and increased real demand for fashion and accessories driven by the resumption of outdoor activities, demand is expected to rise significantly. Consequently, sales are projected to increase by more than 10% compared to the first quarter of 2019.

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