[Click eStock] SSG.Com Listed but Still 'Emart'

[Asia Economy Reporter Junho Hwang] Yuanta Securities maintained Emart's target stock price at 300,000 KRW on the 3rd, forecasting that although SSG.Com, Emart's core subsidiary, is scheduled to be listed this year, the discount effect will be limited.

In the market, there is a forecast that with the listing of SSG.Com this year, a stock price discount of about 50% for the holding company Emart will occur. However, Yuanta Securities' analysis emphasizes the need to first reflect the value of SSG.Com before applying the 50% discount rate.

First, Emart's projected controlling net profit for this year, excluding SSG.Com, is around 600 billion KRW. Considering the consensus, it is expected to achieve 500 billion KRW. Even applying a conservative P/E ratio of 8 times, the appropriate valuation is about 4 to 4.8 trillion KRW, which is the current market capitalization level.

Additionally, the strategy of Emart and SSG.Com is to respond to the online grocery market through the expansion of discount store PP centers. Therefore, despite the listing of SSG.Com, the benefits of growth in the online grocery market should remain with Emart.

Furthermore, after the listing of SSG.Com, it is highly likely that the company will pursue a merger between its other e-commerce subsidiary, eBay Korea, and SSG.Com. Organizational integration is required to derive synergy between the two companies. In this case, the parent company Emart holds an 80% stake in eBay Korea, which is higher than its 50% stake in SSG.Com, so through the merger, Emart can increase its control over the merged SSG.Com. This is a positive aspect for the parent company's shareholder value.

Jinhyup Lee, a researcher at Yuanta Securities, stated, "Emart is the top priority stock in the distribution sector this year," adding, "This is because the benefits of large discount stores due to rising prices and the listing momentum of SSG.Com are expected to fully materialize."

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