[Click eStock] "This Year, Favorable Environment for Emart... Expecting Service Changes"

[Asia Economy Reporter Myunghwan Lee] Korea Investment & Securities announced on the 12th that it maintains a buy rating and a target price of 220,000 KRW for Emart, citing expectations of deregulation in discount stores and a favorable environment.

Korea Investment & Securities forecasts Emart's consolidated sales for the first quarter of this year to increase by 18.8% year-on-year to 7.0033 trillion KRW, while operating profit is expected to decrease by 5.6% to 116.3 billion KRW. Net profit is projected to rise sharply due to a one-time gain of approximately 800 billion KRW from the sale of Emart Seongsu branch. Same-store sales growth at discount stores is expected to be 2.4%, and the transaction amount growth of SSG.com is forecasted at 23%. SSG.com is expected to record a loss of 29.5 billion KRW. Korea Investment & Securities analyzed that the effect of store remodeling and a slowdown in online market growth will reduce the decline in customer numbers, leading to a 4.5% same-store sales growth in the second half of this year.

Korea Investment & Securities analyzes that a favorable environment will be created for Emart this year. Due to the high online penetration rate, the growth rate of the online market is expected to slow down significantly. The overall online market is predicted to grow by 12.1% this year, slightly slower than last year. This slowdown in online market growth is positive for discount stores.

Changes such as paid services and delivery are also seen as positive. The transaction amount of SSG.com is expected to increase by 17.5% year-on-year, exceeding the market growth rate. This is attributed to the effect of the paid membership launching in the second quarter, improvements in delivery services, and strengthened product competitiveness.

Myungjoo Kim, a researcher at Korea Investment & Securities, stated, "The reason Emart's stock price has performed well compared to the index over the past month is due to expectations of deregulation in discount stores and solid same-store sales growth amid rising prices," adding, "With a favorable industry environment and the concretization of SSG.com's paid membership, Emart's stock price is expected to continue its positive trend."

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