April 25, 2024

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[THE INVESTOR] GS Retail’s earnings are likely to improve, said Hanwha Investment and Securities on Aug. 23, maintaining a “buy” recommendation and 42,000 won (US$37.50) target price.

Its operating profit in the second quarter rose 4.9 percent on-year to 55.7 billion won. Despite spending 11 billion won in supporting branch owners, profits advanced by cost control. In the third quarter, the business environment will be more favorable, and supermarket division will be able to contribute more thanks to Chuseok holidays. The upswing could continue, pushing operating profits up 10 percent to 61.1 billion won, said analyst Nam Seong-hyeon.

Although uncertainties remain from minimum wage hike, the retailer is about to turn around and investors should keep an eye on it from a long-term perspective, he said. 

By Hwang You-mee (glamazon@heraldcorp.com)