[THE INVESTOR] E-mart’s decision to sell its stake in Costco and property leased to the wholesaler will work in its favor, said Samsung Securities on Sept. 14, maintaining a “buy” recommendation and 265,000 won (US$234.04) target price.
The retail giant announced that it will offload 3.3 percent stake in Costco along with the real estate leased to three warehouse branches to the wholesaler, and will secure large profits, said analyst Nam Ok-jin.
Considering the size of the branches and the nearing expiry date of leases, which puts Costco at a disadvantage, the deal will be worth hundreds of billions of won, according to the analyst.
The hypermarket chain cited restructuring and promotion of management efficiency as the reasons for the sale, which is in line with closing down underperforming branches at home and overseas in the first half, added Nam.
By Hwang You-mee (firstname.lastname@example.org)