April 17, 2024

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Hyundai Home Shopping will turn to a holding company next month and its consolidated subsidiaries will be reassessed, said Yuanta Securities Korea on Feb. 26 raising the target price to 159,000 won (US$142.18) from 135,000 won.

The transition will allow it to focus less on home shopping business that is losing its competitive edge with more emphasis on private subsidiaries Hyundai Rental Care and Hyundai L&C. The biggest strength of operating a home shopping network is the ability to generate stable cash. The inflow could be utilized for M&As and funding its subsidiaries to secure further growth momentum, said analyst Lee Jin-hyeop.

Hyundai Rental Care in particular is underestimated as it remained in the red but in the first half of next year will reach break-even point. The time has come to reconsider the company’s value. Changes across Hyundai Department Store to expand dividends will also add value to Hyundai Home Shopping’s cash equivalents, the analyst added. 

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