Hana Securities has raised its target price for BGF Retail to 180,000 won, citing strong performance stability and potential for improved profitability. The investment recommendation remains a 'buy.'
In a report released on the 27th, analyst Park Jong-dae explained that while the stagnation in store openings has led to a decline in convenience store growth rates, favorable operating conditions and improvements in product mix are positive factors.
Park noted, "As the growth in the number of convenience store locations has reached its limit, BGF Retail is achieving both revenue growth and profitability improvements through enhanced micro-competitiveness. The company is also expanding services for foreign tourists and expatriates."
He added that BGF Retail plans to increase the number of beauty-focused and grocery-specialized stores to 500 each by the end of the year to attract more female customers. Additionally, the company is expanding its offerings of health supplements and low-sugar products for senior customers, aiming to continuously improve gross profit margins.
Park also mentioned that the expansion of overseas operations is another factor for potential profitability improvement. He noted that while same-store sales growth has slowed in the third quarter, the effects of consumer coupons from late July to early August last year have created a high base, and the heat wave in early August has reduced foot traffic.
However, he stated, "As we approach the end of August, growth rates are recovering. The inbound effect from foreign tourists is stronger than in the second quarter, and the earlier Chuseok holiday in September is expected to boost third-quarter growth rates."
* This article has been translated by AI.
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