Shares of Hyundai Department Store are experiencing a strong uptick, driven by a rise in sales from foreign tourists. Recent reports from securities firms indicate an upward revision of target prices for the company.
As of 9:57 a.m. on June 16, Hyundai Department Store's stock was trading at 193,100 won, up 9,900 won (5.40%) from the previous trading day. At one point, the stock surged nearly 7% to 196,000 won.
The buying momentum is attributed to reports from the securities industry suggesting that sales from foreign tourists will continue to grow. Park Sang-jun, a researcher at Kiwoom Securities, noted, "The weakening won and the impact of the Korea-Japan relationship have led to a significant increase in foreign tourists, particularly from China. We expect foreign sales to grow by approximately 50% compared to the same period last year, driven by the rise in inbound Chinese tourists."
Lee Jin-hyup, a researcher at Hanwha Investment & Securities, added, "The increase in inbound tourists during the peak season is expanding demand from Myeongdong to Gangnam. We have seen changes in foreign sales growth since April."
The strength of the dollar is also seen as a positive factor. The depreciation of the won has made South Korea an attractive shopping destination for foreigners. According to Hanwha Investment & Securities, while foreign sales at Hyundai Department Store increased by only 22% year-on-year in the first quarter, they surged by approximately 40% and 70% in April and May, respectively.
Recently, several securities firms have raised their target prices for Hyundai Department Store. This month, four firms, excluding Hana Securities and Leading Investment & Securities, have increased their target prices. Meritz Securities, Hanwha Investment & Securities, Korea Investment & Securities, and Kiwoom Securities have set their target prices between 170,000 and 220,000 won.
However, concerns remain regarding Zinus, a subsidiary acquired by Hyundai Department Store Group for 880 billion won in 2022. Hana Securities projected in a recent corporate analysis report that Zinus will likely report an operating loss in the second quarter similar to that of the first quarter. Nonetheless, they noted that with Amazon orders resuming since late May and ongoing efforts to improve cost structures through the sale of a factory in Georgia and the reduction of logistics centers, there is potential for recovery in future performance.
* This article has been translated by AI.
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