[Click eStock] "Hyundai Department Store, Harmony of Fundamentals and Market Leadership"

On September 26, IBK Investment & Securities raised its target price for Hyundai Department Store from 96,000 won to 106,000 won, citing the turnaround to profitability in its duty-free business division and projecting strong third-quarter results for this year. The investment opinion was maintained as 'Buy'.

Hyundai Department Store's consolidated net sales for the third quarter are estimated at 1.095 trillion won (up 5.6% year-on-year), with operating profit expected to reach 88.3 billion won (up 36.7%). Nam Sung-hyun, a researcher at IBK Investment & Securities, explained the background for this positive outlook, stating, "▲ Growth at existing stores reached around 5-6% due to increased shopping demand from consumption coupons and the heatwave in July and August; ▲ There was an additional boost from increased demand for Chuseok gift sets in September; and ▲ We expect further improvement from the closure of the unprofitable Dongdaemun duty-free store."

Researcher Nam added, "In the third quarter, there was strong sales performance in jewelry, watches, and luxury goods, and even previously sluggish categories such as apparel and home appliances showed positive trends." He analyzed, "These results were driven by the government's supplementary budget (including the benefit from consumption coupons and rebates for top-rated energy-efficient appliances), which led to overall performance growth."

Optimism is also growing for the duty-free business division. The cost structure has become leaner following the closure of the Dongdaemun duty-free store, and the number of foreign visitors to Korea is gradually recovering, boosting customer traffic. Nam commented, "Although sales may decrease somewhat due to the closure of the Dongdaemun store, profitability is expected to improve thanks to lower fixed costs." He projected that the duty-free business division will post an operating profit of 1.9 billion won, marking a return to profitability.

However, the outlook for subsidiary Zinus is somewhat subdued. Nam noted, "Due to the high base from last year and the impact of tariffs, Zinus's contribution to consolidated results is likely to remain low until the first half of 2026." Nevertheless, he forecast, "As the duty-free business division improves its fundamentals and the growth rate of existing stores in the core business recovers, the overall fundamentals of the company should remain largely intact."

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