Kiwoom Securities announced on June 30 that it has raised its target price for GS Retail from 30,000 won to 32,000 won, reflecting the strong performance across all business divisions, particularly in convenience stores, and the recovery in domestic consumption. The firm maintained its investment rating at 'Buy.'
Park Sang-jun, a researcher at Kiwoom Securities, stated, "Considering the solid revenue flow in the second quarter, we expect the same-store sales growth in convenience stores to continue in the second half of the year. Given the performance trends, the recent stock price adjustment could present an opportunity."
He added, "The consolidated operating profit for the second quarter is expected to exceed market expectations slightly, reaching 105.1 billion won, with all divisions, including convenience stores, supermarkets, and home shopping, showing favorable performance trends."
Park explained that the convenience store segment is likely to see a 6% increase in same-store sales due to the robust domestic consumption environment, improvements in store mix from restructuring underperforming locations, and benefits from competitors' store adjustments. He noted that the slowdown in depreciation expense growth would also contribute to an increase in operating profit margins.
He further indicated that supermarkets would benefit from the recovery in domestic consumption and expansion effects, while home shopping would see profit improvements through a focus on high-margin fashion sales. Park suggested that the potential for upward revisions in operating profit margins remains open, considering the focus on profitability and the operational leverage from convenience stores.
Additionally, he remarked that the favorable domestic consumption environment is expected to continue benefiting the company this year, with results from its profitability-centered management strategy leading to sustained profit growth.
* This article has been translated by AI.
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