April 26, 2024

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[THE INVESTOR] Hyundai Department Store will reap solid revenue from department stores and has secured a new growth momentum due to its duty-free business, said Mirae Asset Daewoo on Oct. 4, upgrading the recommendation to a “buy” from a “trading buy” and maintaining 125,000 won (US$110.85) target price. 

Gross revenue in the third quarter will rise 4 percent on-year to 1.4 trillion won and operating profit by 11 percent to 77.1 billion won. It will complete revamping the Cheonho branch by end-November, and boosted by steadily growing sales of luxury goods and cost cutting the department store sector will post strong earnings, said analyst Kim Myeong-ju.

After opening a duty-free store in November it will suffer an operating loss as the new business stabilizes, but focus should be on securing growth momentum rather than short-term earnings dip. The time to settle down can be shortened depending on the speed of recovery of Chinese inbound group tourism and its success in attracting three major luxury brands that are not sold by competitors, added the analyst. 

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