Korea Investment & Securities noted on the 21st that Emart would benefit from the easing of competition in the industry this year. They maintained their investment opinion of "buy" and set the target price at 115,000 won, a 27.8% increase from 90,000 won. The closing price of Emart on the previous trading day was 78,900 won.
Korea Investment & Securities assessed that the restructuring of Homeplus would positively impact Emart by easing competition in the retail industry.
Kim Myung-joo, a researcher at Korea Investment & Securities, stated, "It is difficult to determine the possibility of Homeplus's bankruptcy at this time, but there is a high likelihood that the company will close underperforming stores and reduce discounts during its restructuring process," adding, "This will likely be a positive factor for Emart in easing competition in the industry."
The researcher noted, "There may be short-term price adjustments due to rotation trading, but there are recovery factors for valuation, such as improvements in store efficiency and the establishment of a joint venture with Alibaba," and he advised considering price adjustments as a good buying opportunity. He presented Emart as the top pick in the sector.
The growth potential of the quick commerce business, which delivers products ordered by customers within 1 to 2 hours, is also a positive factor for Emart's performance. Emart is expanding the delivery area of SSG.com’s dawn delivery service through collaboration with CJ Logistics, as there is a high possibility of utilizing existing offline stores.
Korea Investment & Securities estimated that Emart will record consolidated sales of 7.2724 trillion won and an operating profit of 144.6 billion won in the first quarter of this year (January to March). This represents increases of 0.9% and 206.9% compared to the same period last year, respectively. The operating profit significantly exceeds the market forecast of 110 billion won.
The researcher predicted, "One reason for the underperformance of Emart's existing stores from last year to this year was the poor sales of the PP center, which serves as a logistics base using stores," adding, "If sales from quick commerce using the stores increase in the future, it could offset some of the poor sales of the PP center (Picking & Packing)."