[Click eStock] "Emart's Efforts to Improve Core Business Profitability... Target Price Maintained"

Heungkuk Securities maintained a buy rating and a target price of 90,000 KRW for Emart on the 19th, stating that "the possibility of a turnaround next year following two consecutive years of poor operating performance."

On the same day, Jongryul Park, a researcher at Heungkuk Securities, said, "Emart's consolidated sales for the fourth quarter this year are expected to be 7.46 trillion KRW, down 0.3% compared to the same period last year, while operating profit is expected to increase by 264.2% to 46.6 billion KRW, recording results that compensate for the previous quarter's sluggish performance," adding, "this is due to a slight improvement in separate segments such as discount stores, Traders, and specialty stores, along with some improvement in the operating profit of consolidated subsidiaries."

Jung-gu Sunhwa-dong Emart Headquarters. Photo by Jo Yongjun jun21@

He also stated, "Among the consolidated subsidiaries, e-commerce showed a continued reduction in losses due to cost control despite a decrease in transaction volume caused by the industry's overall business strategy shift, which is positive," and added, "there were improvements in the performance of some subsidiaries such as SKC Company and Chosun Hotel, but the expanded operating loss of Shinsegae Construction had a negative impact."

For the full year, consolidated sales are expected to increase by 0.8% to 29.6 trillion KRW compared to last year, while operating profit is forecasted to decrease by 37.2% to 85.1 billion KRW. Researcher Park said, "Breaking away from the previously poor performance trend, gradual improvement in results is expected next year," and predicted, "through improved performance in separate segments and a balanced recovery in consolidated subsidiaries, next year's consolidated sales will increase by 3.1% to 30.5 trillion KRW, and operating profit will rise by 108.4% to 177.4 billion KRW."

Improving profitability in core businesses including discount stores and turning e-commerce profitable are identified as key tasks to be actively pursued next year. The recent aggressive domestic expansion strategy of the Chinese direct purchase site AliExpress is also a burden. Researcher Park noted, "It is negative that the performance of the main business falls short of expectations," and added, "efforts to improve profitability in discount stores and the rapid normalization (turning profitable) of the e-commerce sector are major business goals to be achieved next year."

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