IBK Securities Raises Hyundai Department Store Target Price by 92% Amid Strong Performance

IBK Securities announced on June 17 that it has raised its target price for Hyundai Department Store from 130,000 won to 250,000 won, an increase of 92.3%, citing strong performance in both its department store and duty-free shop sectors. The firm maintained its 'buy' rating on the stock.

Nam Seong-hyun, a researcher at IBK Securities, stated, "We expect the second-quarter results to significantly exceed our initial estimates. Given the strong performance of the department store and duty-free divisions, we believe profit growth is achievable."

IBK Securities forecasts Hyundai Department Store's consolidated net sales for the second quarter to reach 1.1953 trillion won, with an operating profit of 112.1 billion won. This represents year-on-year increases of 10.6% and 29.0%, respectively.

Nam added, "We anticipate existing store growth rates to be in the mid-10% range, and with balanced growth across all product categories including luxury goods, clothing, fashion, and accessories, the increase in operating profit is expected to more than offset the underperformance of Zinus."

The duty-free business is also expected to contribute to improved performance. He noted, "The profitability of downtown duty-free shops is rapidly improving due to the influx of foreign visitors, and we expect increased profits from the operation of the DF2 airport store."

Looking ahead to the second half of the year, Nam projected that improvements from the completion of efficiency measures at Zinus, continued growth in the department store sector, expansion of duty-free shop space at Incheon Airport, and growth potential for The Hyundai Global will further enhance performance momentum.

Nam remarked, "With increased asset income and the influx of foreign visitors expanding consumer capacity, we have raised our target multiple from 12 times to 16 times. Despite the underperformance of Zinus in the second quarter, we expect profit growth to continue, leading to an expansion in growth rates."

* This article has been translated by AI.