[Click eStock] Hyundai Department Store, Earnings Expectations Lead to 'Target Price Upgrade'

[Asia Economy Reporter Lee Seon-ae] IBK Investment & Securities maintained its buy rating on Hyundai Department Store on the 11th and raised the target price from the previous 120,000 KRW to 150,000 KRW. This is based on applying this year's consolidated net sales forecast of 20% (previously 15%) and operating profit forecast of 26% (previously 21%). The target price is based on this year's forward EPS of 10,758 KRW (previously 10,250 KRW), reflecting an average of 14 times IBK Duty-Free Distribution.

Ji-Young Ahn, a researcher at IBK Investment & Securities, predicted, "This year's department store sales are expected to significantly exceed the annual guidance of 8-9%, driven by aggressive momentum from The Hyundai, strong performance of large stores including the main branch, Pangyo, and Trade, as well as a concrete recovery in customer numbers at medium-sized stores."

The Hyundai has a 50% sales share from the MZ generation, and the entry of premium brands is accelerating, so annual sales are expected to comfortably exceed 800 billion KRW. Medium-sized stores such as Mokdong, Sinchon, and Daegu are also expected to benefit from reopening synergies through renovations. Despite uncertainties in the duty-free sector due to China, there appears to be no difficulty in large-scale new entries of premium brands in the third quarter of this year. The luxury brand effect within airport stores is helping the duty-free business overall to escape from competitive disadvantages. Researcher Ahn emphasized, "With a significantly lower premium brand ratio compared to competitors, the company is now actively strengthening its negotiating power, so a large-scale MD change and sales increase are expected in the second half of the year."

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