Shinhan raises Hyundai Department Store target, calls it world’s cheapest peer

 
Shinhan Investment Corp. on 7th kept its “buy” rating on Hyundai Department Store and raised its target price 17% to 140,000 won. The brokerage said improving department store conditions should continue, supported by the government’s expansionary fiscal policy, a recovery in consumption and rising sales to foreign customers.
 
Cho Sang-hoon, an analyst at Shinhan Investment, said the rebound in department store purchasing power that began in the third quarter is expected to last through 2026. He called Hyundai Department Store “the cheapest department store company in the world” and Shinhan’s top pick in the sector.
 
Hyundai Department Store posted first-quarter consolidated revenue of 950.1 billion won, down 13.5% from a year earlier, and operating profit of 98.8 billion won, down 12.1%, in line with market expectations. Shinhan said weakness at Zinus persisted, but the core businesses — including department stores and duty-free — offset much of the drag. Excluding a one-off gain at Zinus in the first quarter of last year — a 16.7 billion won reversal of an anti-dumping duty provision — operating profit would have risen 3%, Shinhan said.
 
The department store business continued to grow. Total sales rose 10%, and combined growth in April and May reached 15%. Large-format stores, including The Hyundai, and higher foreign-customer sales drove results. Sales to foreign customers rose 22% from a year earlier, lifting their share to 6.1%.
 
Cho said all product categories were performing well, including high-margin fashion. He added that cost efficiencies and operating leverage from higher sales helped department store operating profit rise for a third straight quarter.
 
Shinhan also cited valuation and shareholder returns. Cho said that despite a recent surge in the stock price, Hyundai Department Store’s projected 2026 price-to-earnings ratio is about 9, more than 30% below peers.
 
He said total dividends are expected to increase from 30.6 billion won in 2024 to 46.4 billion won in 2025 and to more than 50.0 billion won in 2027. He added that the company has completed the cancellation of 4.7% of its treasury shares and plans to cancel another 1.1% bought this year within the year.