[Click eStock] "Hyundai Department Store to Surpass Break-even Point for New Business in Q4"

Temporary Closure of Trade Center Branch Slightly Slows Q3 Earnings Growth
NH Investment & Securities "Maintains Hyundai Department Store Target Price at 105,000 Won"

[Asia Economy Reporter Gong Byung-sun] Hyundai Department Store's third-quarter performance this year is expected to show favorable results, excluding the impact of temporary closures. Hyundai Department Store's new businesses are also expected to perform well amid COVID-19.

On the 28th, NH Investment & Securities estimated Hyundai Department Store's third-quarter sales to increase by 23% year-on-year to KRW 2.2107 trillion, and operating profit to rise by 33% during the same period to KRW 59.3 billion.

Growth in both the department store and duty-free sectors is expected to slow somewhat compared to the first half of the year. NH Investment & Securities projected a 6% growth rate for Hyundai Department Store's existing department stores in the third quarter. The average daily sales of the duty-free stores in July were also somewhat sluggish at KRW 6.2 billion.

Researcher Joo Young-hoon of NH Investment & Securities explained, "The reason each sector's performance appears to have slowed compared to the first half is due to the temporary closure of the Trade Center branch in July and August." In July, Hyundai Department Store's Trade Center branch suspended operations for seven days due to confirmed COVID-19 cases. However, he emphasized, "The existing department stores' growth rate in September is expected to be around 13%, and the average daily sales of duty-free stores in September are projected at KRW 9 billion, raising expectations for the winter peak season."

New businesses are also expected to show strong performance. Despite COVID-19, Hyundai Department Store opened one new department store, two outlets, and two duty-free stores. NH Investment & Securities estimated that, as previously forecasted, both the new department stores and duty-free stores are highly likely to reach monthly breakeven points during the fourth quarter.

Researcher Joo said, "Whether the new stores stabilize their sales and profitability is the most important factor in forecasting Hyundai Department Store's performance and stock price," adding, "The rebound in department store and duty-free store performance in September proves that Hyundai Department Store's competitiveness remains intact."

Accordingly, NH Investment & Securities maintained its investment opinion of "Buy" on Hyundai Department Store with a target price of KRW 105,000. The closing price on the previous day was KRW 81,600.

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