Hyundai Department Store Could See Stock Rebound as Burden Factor Zinus Expected to Recover

[Financial News] NH Investment & Securities maintained its "Buy" rating on Hyundai Department Store, saying the company could seek a rebound in its share price as its subsidiary Zinus, identified as a drag on performance, is expected to recover. However, it lowered its target price from 180,000 won to 170,000 won, applying a target price-to-earnings ratio (PER) of 14 times to projected net income attributable to controlling shareholders over the next 12 months.
Young-Hoon Joo, an analyst at NH Investment & Securities, said on the 23rd, "Hyundai Department Store's consolidated net sales are expected to reach 1.1406 trillion won and operating profit 89.2 billion won in the third quarter, up 12.9% and 22.7%, respectively, from the same period a year earlier."
The department store and duty-free segments have continued to perform well since the first half, while the subsidiary Zinus is also recovering.
Joo said, "We believe the department store segment continues to benefit from the wealth effect and momentum from the increase in inbound foreign visitors. Zinus, which has weighed on consolidated results, is expected to see its loss narrow significantly from the previous quarter, potentially marking a shift to year-on-year operating profit growth."
Joo added, "As the key investment points remain intact, we believe the stock could seek a rebound at its current valuation level. Despite concerns that a stronger Korean won could slow inbound momentum, sales to foreign customers are estimated to increase by more than 60% this year from the previous year, and this indicator is also a key factor in a valuation re-rating."

[email protected] Im Sang-hyeok Reporter