[Click eStock] Hyundai Department Store, Recovery in Fashion, Cosmetics, and Food Sectors... Sales Growth Expected This Year

[Asia Economy Reporter Hwang Yoon-joo] Ebest Investment & Securities maintained a 'Buy' rating and a target price of 95,000 KRW on Hyundai Department Store on the 28th, citing a notable recovery in the fashion sector and expected recovery in cosmetics and food sectors.

Orin Ah, a researcher at Ebest Investment & Securities, stated, "New stores being incorporated into existing stores are expected to result in stable sales growth," and "The annual operating profit for 2022 is projected to increase by 38.5% to 366.1 billion KRW."

Researcher Oh analyzed, "According to Ebest Investment & Securities' estimates, Hyundai Department Store's same-store sales growth rate for January to February 2022 is expected to close at around 12%," and "Growth is anticipated across almost all sectors."

Researcher Oh predicted, "The recovery in the fashion sector is expected to continue due to increased outdoor activities following the reopening, along with cold weather."

He added, "This year, recovery is expected in product groups most closely related to outdoor activities, such as cosmetics and food," evaluating that "these sectors had not recovered to normal demand levels of 2019 even by 2021."

Researcher Oh stated, "Since Hyundai Department Store was a latecomer in the duty-free market, although commission fees have improved, they are still judged to be slightly higher compared to peers," and forecasted, "The entry of new brands and MD restructuring will help improve profitability."

He continued, "With the extension of the airport duty-free store rent calculation based on sales-linked operating rates until June 30 of this year, the company’s duty-free stores may also expect a reversal of depreciation expenses previously reflected on airport usage rights assets."

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