LS Securities announced on July 21 that it has raised its target price for Hyundai Department Store from 110,000 won to 200,000 won, citing ongoing improvements in the department store and duty-free shop performance. The firm maintained its 'buy' rating.
Orina Oh, a researcher at LS Securities, stated, "For the second quarter, consolidated sales are expected to reach 1.034 trillion won, with operating profit at 83.2 billion won, aligning with market expectations." She noted that sales at existing department stores increased by 15% in April, 20% in May, and 14% in June, indicating strong growth.
Oh added, "Considering that June had two fewer weekend operating days compared to the previous year, the actual sales trend was even more robust. Foreign sales also surged, increasing by 40% in April, 66% in May, and 92% in June, now accounting for about 8% of total sales."
She further explained, "Foreign consumer spending is expanding not only at The Hyundai Seoul and the Trade Center but also at the Pangyo, main, Songdo, and Gimpo locations. The luxury watch and jewelry sectors continue to see high growth, and home appliances are performing well due to promotional effects."
Additionally, she noted, "The duty-free shop at Incheon Airport's DF2 (cosmetics, perfumes, liquor, and tobacco) area is quickly stabilizing, leading to significant profit improvements. DF2 has reportedly reached its break-even point since May, and as the top operator at Incheon Airport, its buying power is enhancing the profit margins and contribution rates for cosmetics purchases at downtown stores."
Oh also mentioned, "Zinus is undergoing restructuring, aiming to eliminate inefficient assets by the end of 2027 and secure annual cost savings of about 50 billion won starting in 2028. While the delay in Zinus's recovery is disappointing, the positive performance of its core business offsets this setback."
* This article has been translated by AI.
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