[THE INVESTOR] E-mart’s earnings will remain slow, said KB Investment and Securities on Sept. 27, lowering the target price to 270,000 won (US$242.04) from 310,000 won.
Its net revenue in the third quarter will rise 5 percent on-year to 4.49 trillion won and operating profit 7 percent to 194.9 billion won. Revenue from offline stores will slip 0.4 percent down from the same period last year and operating profit will decline 9 percent, burdened by slow sales, wage hike and costs for opening specialty stores, but online mall, Traders and Emart24 will remain solid, said analyst Park Sin-ae.
Earnings will continue to be sluggish in the third quarter but investors should keep an eye out for signs of stock price recovery. When the blueprint for collective online business is released at the end of this year, it could serve as a momentum. Although slow earnings from discount stores this year is disappointing, the bottom line will be lifted next year on the back of low baseline effect, efforts to cut costs and attracting customers through specialty stores, said the analyst maintaining a “buy” recommendation.
By Hwang You-mee (firstname.lastname@example.org)