Securities firms positively evaluated Hyundai Department Store's city duty-free shop efficiency plan and subsequently raised their target prices.
Yuanta Securities Korea maintained its investment opinion of 'buy' on Hyundai Department Store on the 2nd, raising the target price from 75,000 won to 84,000 won. This is 42% (25,700 won) higher than Hyundai Department Store's previous closing price of 59,300 won.
Lee Seung-eun, a researcher at Yuanta Securities Korea, assessed Hyundai Department Store's duty-free business 'turn-around' strategy as 'a wise choice.'
Hyundai Department Store has decided to close its Dongdaemun branch among city duty-free shops starting in August. Additionally, the Trade Center branch will reduce its operating area by about 20% and focus on luxury products. Hyundai Department Store estimates that this will save approximately 35 billion won in fixed costs annually. The profitable airport branch will remain intact.
Other securities firms believe that Hyundai Department Store's decision to close the Dongdaemun branch, which had recorded losses, will benefit its performance and have adjusted their target prices upwards. ▲ Korea Investment & Securities 65,000 won → 80,000 won ▲ Kiwoom Securities 63,000 won → 75,000 won ▲ Eugene Securities 65,000 won → 75,000 won ▲ Shinhan Investment Corp. 60,000 won → 71,000 won ▲ Daishin Securities 60,000 won → 70,000 won.
Kim Myung-joo, a researcher at Korea Investment & Securities, noted, 'Thanks to ZINUS's turn-around and the reduction of losses in the duty-free shop, the performance stability of Hyundai Department Store is increasing,' and added, 'Due to favorable demand conditions in the retail industry, the stock price is also expected to be good.'
Yoo Jeong-hyeon, a researcher at Daishin Securities, mentioned that 'the city duty-free business of Hyundai Department Store, which had been in losses, has a greater possibility of turning profitable in the mid-term', suggesting that 'it may achieve the break-even point (BEP) solely through the Trade Center branch by 2026.'
Oh Rin-ah, a researcher at LS Securities, stated that while maintaining the target price of 70,000 won for Hyundai Department Store, it is evident that improvement efforts stand out. Oh commented, 'Considering the recent high exchange rates and changes in tourist consumption patterns, it is clear that the attractiveness of the duty-free industry is diminishing compared to the past,' and added, 'The decision to end operations at Dongdaemun branch is expected to have a positive effect on Hyundai Department Store's performance and stock price.'