[THE INVESTOR] Hanwha Galleria Timeworld will turn to black this year but is burdened by valuation, said Korea Investment and Securities on May 4.
It has managed to turn to black in the first quarter with 31 million won (US$28,818) operating profit, although its duty-free business made losses, the figure has almost halved from the same period last year, said analyst Choi Min-ha.
Daily revenue from its downtown duty-free store is maintaining an upward momentum as it adds more brands and profits are improving from the gradual decline of commissions and systematic reshuffle. In February, it completely closed down its duty-free outlet in Jeju Airport, which suffered close to 10 billion won loss last year. Its Seoul branch is concentrating on improving profitability by cutting marketing campaign, and the duty-free sector will turn to black this year, according to Choi.
Even though profits are improving, its stock price is burdensome trading at 25.1 times its price-earnings ratio, said the analyst maintaining a “hold” recommendation.
By Hwang You-mee (glamazon@heraldcorp.com)