Emart Stock Price, Diverging Forecasts

[Asia Economy Reporter Junho Hwang] Opinions on the stock price outlook for Emart are divided. While there is optimism about the expansion of the online market, securities firms present differing views on whether this will actually boost the stock price.

On the 11th, six securities firms, including Korea Investment & Securities, lowered their target prices for Emart. The weak performance in Emart's fourth-quarter results last year was a factor in the downgrade. Although sales increased by 19.8% year-on-year to 6.8603 trillion KRW, operating profit fell by 10.3% to 76.1 billion KRW, missing market expectations. Separate operating profit dropped by 50% due to increased labor costs from temporary staff expansion caused by COVID-19 and higher commission fees.

SSG.COM, which recorded a loss of 10.4 billion KRW in 2020, saw its deficit widen further to 40.2 billion KRW last year. Additionally, amortization expenses of 24 billion KRW related to the acquisition price allocation from the Starbucks and eBay Korea acquisitions, and one-time costs of 17.4 billion KRW associated with the eBay Korea merger, were cited as factors making it difficult to foresee a quick boost in Emart’s stock price.

Younghoon Joo, a researcher at NH Investment & Securities, predicted, "Since the focus will be on expanding scale for the time being, operating losses of 30 to 40 billion KRW per quarter are expected to continue." Yoonhee Choi, a researcher at Meritz Securities, stated, "It is time to prove that the aggressive cost investments so far were indeed 'investments' through remarkable scale growth."

On the other hand, five securities firms, including Mirae Asset Securities, maintained their target prices. The main reason cited was the strengthening of integration between online and offline businesses. Emart plans to launch an online integrated membership in the second quarter and a group-wide online-offline integrated membership starting in the fourth quarter. This is expected to accumulate diverse customer data and enhance customer lock-in effects.

Orina, a researcher at Ebest Securities, explained, "Discount stores are stably defending through strategies such as strengthening groceries and MD efficiency, and with many changes expected this year including the membership launch and SSG.COM’s IPO, it is necessary to keep steady attention." Minjung Kyung, a researcher at Mirae Asset Securities, also forecasted, "If a full-fledged collaboration strategy with Emart becomes visible for Gmarket Global, which so far had no investments and was merely a simple intermediary platform, a valuation increase is definitely possible."

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