[Click eStock] "GS Retail Expected to Meet 3Q Earnings Expectations"

Hanwha Investment & Securities maintained its 'Buy' rating and target price of 30,000 KRW for GS Retail, expecting the company's Q3 earnings this year to meet market expectations.

On the day, Lee Jin-hyeop, a researcher at Hanwha Investment & Securities, stated, "While the convenience store business is expected to see a decline in profits and underperformance compared to last year, the strong performance of non-convenience store businesses such as supermarkets and hotels is expected to continue, and the deficit in the common and other business divisions could shrink by 25.6 billion KRW compared to last year." Q3 revenue is projected to increase by 6.5% year-on-year to 3.1 trillion KRW, and operating profit is expected to rise by 31.7% to 115.3 billion KRW, aligning with the market consensus operating profit of 114 billion KRW.

Operating profit from convenience stores is forecasted to decrease by 2.3% year-on-year to 73.2 billion KRW, which is interpreted as an effect of improvements in the non-convenience store business. The researcher analyzed, "The strong performance in the non-convenience store business continues, and particularly, the Q3 operating loss in the common and other business divisions has narrowed to 20.3 billion KRW, leading to expected earnings improvement. Cost reduction efforts in convenience stores and common and other businesses are ongoing, and it is known that strategic revisions for GS Fresh Mall have begun, indicating overall efforts to improve business profitability."

The researcher added, "However, for the stock valuation to recover, the convenience store sector must eventually rebound," and said, "This will be possible through traffic recovery by stabilizing the macro environment. Due to macro factors such as inflation, convenience store traffic is temporarily dispersing to relatively cost-effective channels."

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