[Click eStock] "Emart, Q4 Earnings Improvement Expected"

Starbucks Transfer and Existing Stores Along with Specialty Stores Expected to Drive Performance Recovery
DB Financial Investment "Emart Target Price Raised from 210,000 KRW to 214,000 KRW"

[Asia Economy Reporter Gong Byung-sun] Emart is expected to show improved performance in the fourth quarter of this year, boosted by the inclusion of Starbucks. Next year, it is analyzed that Emart's existing stores and specialty stores will show a recovery in performance.

On the 13th, DB Financial Investment estimated Emart's sales for the fourth quarter of this year to be 6.8585 trillion KRW, an increase of 19.7% compared to the same period last year, and operating profit to be 192.6 billion KRW, up 128% during the same period. This exceeds the market consensus by 0.11% and 34.31%, respectively.

Emart's aggressive moves, including the acquisition of Starbucks, are expected to have a positive impact on its performance. Emart carried out aggressive mergers and acquisitions (M&A) by selling real estate and also acquired shares of Starbucks. Additionally, it expanded large PP (Picking and Packing) centers capable of online logistics processing by utilizing existing store spaces.

Cha Jae-hyun, a researcher at DB Financial Investment, said, "Emart's new attempts at change increase the likelihood of success for omni-service through online and offline integration," adding, "The market should now focus on the possibility of a rebound in Emart's return on equity (ROE), which has bottomed out."

Next year, performance is expected to improve mainly in existing stores and specialty stores. With the disappearance of negative factors such as the national support fund, growth in offline Emart existing stores is expected to lead to a recovery in operating profit. Also, after restructuring, specialty stores centered on No Brand are expected to turn their operating profit positive.

Researcher Cha explained, "Not only existing stores and specialty stores, but also the expansion of PP centers, strengthening of the food sector, remodeling effects, increased shareholding, and new store openings will raise Starbucks' contribution to performance."

Accordingly, DB Financial Investment maintained its investment opinion of 'Buy' on Emart. The target stock price was raised from the previous 210,000 KRW to 214,000 KRW. The closing price on the 10th was 152,000 KRW.

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