[Click eStock] "Hyundai Department Store, Poor Performance... Target Price Down"

[Asia Economy Reporter Son Sunhee] Securities firms have consecutively lowered their target prices for Hyundai Department Store, which recorded sluggish performance last year.

On the 14th, Korea Investment & Securities announced that it would lower the target price for Hyundai Department Store from the previous 90,000 KRW to 80,000 KRW. Hyundai Department Store posted an operating profit of 68.6 billion KRW on a consolidated basis in the fourth quarter of last year. This was not only a 27.2% decrease compared to the same period last year but also fell significantly short of market expectations. Kim Myungjoo, a researcher at Korea Investment & Securities, said, "Since expectations for all business divisions of Hyundai Department Store are low, we believe the downside rigidity of the stock price is high."

Korea Investment & Securities judged that the sluggishness of the department store division, which had already shown a slowdown in growth rate since last year, has already been reflected in the stock price. For future stock price recovery, the recovery of the duty-free business is key. Researcher Kim predicted, "Assuming that Chinese consumption will fully recover around the Chinese Two Sessions (March 3-4), the recovery of sales in the duty-free industry will also occur around a similar time."

On the same day, Shinhan Investment Corp. also lowered the target price for Hyundai Department Store from 86,000 KRW to 80,000 KRW. The main reason was again the poor performance last year. Additionally, the impact of the fire accident last year, which caused the suspension of operations at Hyundai Premium Outlet Daejeon Branch, seemed to be significant.

Cho Sanghoon, a researcher at Shinhan Investment Corp., said, "We are lowering the target price reflecting the suspension of operations at the Daejeon branch and the slower-than-expected improvement in subsidiary performance," adding, "Despite favorable department store performance over the past two years, concerns about peak-out have persisted, causing corporate value to stagnate." However, he added, "This year, attention should be paid to the recovery of the duty-free industry and enhancement of competitiveness."

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