[Click eStock] "GS Retail, Stock Undervalued Compared to Competitive Business Portfolio"

[Asia Economy Reporter Ji-hwan Park] DB Financial Investment evaluated GS Retail on the 21st as being undervalued in terms of stock price compared to its competitive business portfolio. The investment opinion was maintained as 'Buy,' but the target price was lowered from 49,000 KRW to 43,500 KRW.

Jaehun Cha, a researcher at DB Financial Investment, stated, "The consolidated sales for Q4 this year are estimated to be 2.5593 trillion KRW, an 18.4% increase year-on-year, and operating profit is expected to rise by 156.4% to 65.8 billion KRW." He added, "Although the convenience store industry, which had been recovering with the full-scale With Corona policy, is expected to slow down somewhat due to strengthened social distancing measures, the operating conditions of convenience stores in offices, schools, and entertainment districts are judged to be recovering from the worst phase." He also noted that "while the supermarket division will continue its profit trend through direct store operation efficiency, the hotel/H&B business division is expected to continue operating losses due to the resurgence of COVID-19."

GS Retail recently began full-scale quick commerce business centered on supermarkets and convenience stores located at major hubs. In August, it acquired the food delivery platform Yogiyo and is focusing on the mobility business sector, including acquiring a 1.3% stake in Kakao Mobility for 65 billion KRW.

Researcher Jaehun Cha said, "The performance of the home shopping business division, merged last July, is expected to maintain a moderate profit scale," but added, "However, it is expected that some time will be needed to create synergy with GS Retail's existing businesses."

He emphasized, "Despite the high return on equity (ROE) compared to the average in the distribution industry and the potential for improvement in the operating environment of convenience stores and supermarkets in the future, as well as the strengths of a competitive business portfolio, the stock price remains undervalued."

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