E-Mart Struggles Amid Power Struggle Among Big Players

Despite Continued Foreign Buying, Stock Price Stagnates Due to Institutional Selling

[Asia Economy Reporter Song Hwajeong] Emart's stock price continues to show a sluggish trend amid conflicting buying pressures from major investors. Despite sustained buying by foreigners, the stock price remains stagnant as institutions have been selling continuously due to the fourth wave of COVID-19 caused by the Delta variant and earnings expected to fall short of second-quarter expectations.

As of 9:10 a.m. on the 27th, Emart was trading at 161,000 KRW, up 1,000 KRW (0.63%) from the previous day. Although it is maintaining an upward trend for two consecutive days for the first time in a while, Emart's stock price has not settled in the 160,000 KRW range and continues to show a frustrating trend. It has fallen 2.44% compared to a month ago. Emart, which recorded a 52-week high by rising to the 190,000 KRW range during intraday trading at the beginning of the year, has since steadily declined. Since May, it has been trapped in a box range of 150,000 to 160,000 KRW.

Foreigners have been continuously buying recently, but the stock price cannot rise due to institutional selling. Foreigners have net purchased Emart for eight consecutive trading days until the previous day, totaling 43.5 billion KRW. Due to this buying pressure, the foreign ownership ratio has risen to 32.54%, reaching the highest level of the year. On the other hand, institutions have been selling continuously. Institutions have net sold Emart for six consecutive trading days recently. The net selling amount during this period reached 16.6 billion KRW.

Institutional selling is interpreted as being due to the recent COVID-19 spread phase and earnings expected to fall short of second-quarter expectations. According to financial information provider FnGuide, Emart's second-quarter earnings are expected to be 5.7932 trillion KRW in sales and 23.3 billion KRW in operating profit. Sales represent an 11.67% increase compared to the same period last year, and operating profit is expected to turn positive. However, there are forecasts that the actual results will fall short of this consensus. Kiwoom Securities projected Emart's second-quarter operating profit to be 7.9 billion KRW, below consensus. Park Sangjun, a researcher at Kiwoom Securities, explained, "As competition in the e-commerce channel intensifies, the e-commerce division's operating loss is expected to increase compared to the first quarter, and the subsidiary Chosun Hotel is also estimated to see an expanded deficit compared to the same period last year due to increased fixed costs from new store openings."

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