[Click eStock] "Emart, Target Price Up on SSG.com Value Upgrade"

[Asia Economy Reporter Song Hwajeong] Yuanta Securities on the 30th raised the target price for Emart from 280,000 KRW to 300,000 KRW, reflecting the upward revision of SSG.com’s value. The investment opinion of 'Buy' and the top pick status in the retail sector were maintained.

Researcher Lee Jin-hyeop of Yuanta Securities stated, "We reflected the increase in SSG.com’s value from 4 trillion KRW to 5.4 trillion KRW," adding, "As the listing process of SSG.com is underway, it is a time when active buying of Emart is necessary."

SSG.com is currently expanding from a business model centered on direct purchase (1P) to a marketplace (3P) model that connects consumers and sellers. At the Q2 earnings presentation, Emart announced that the target gross merchandise volume (GMV) for SSG.com in 2023 is 10 trillion KRW, growing at an annual average rate of 29%, and stated plans to double the grocery sector (1P) and triple the lifestyle sector (3P) by 2023. The researcher explained, "The expansion to 3P signifies a shift from the traditional retail approach of generating profits through distribution margins in the e-commerce market to a platform operator approach that creates platform revenues such as advertising and seller service fees," adding, "In the current situation where internet platform operators are accelerating their entry and expansion into the e-commerce market, the existing retail methods cannot win the competition, so change is required, and SSG.com is undergoing that change." He further noted, "From a valuation perspective, securing additional platform revenues can increase future expected profitability, enabling valuation expansion."

Other subsidiaries besides SSG.com are also showing positive trends. The same-store sales growth rebound in separate divisions such as discount stores and Traders continues, and a revaluation of Starbucks Korea’s equity value, expected to be consolidated in Q4, is also anticipated. The researcher explained, "Growth in Emart24 and the U.S. subsidiary continues, and the deficit of Chosun Hotel is judged to have passed its bottom as large-scale store openings have been completed."

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