NH Investment & Securities analyzed on the 11th that the discount rate of the holding company will decrease due to the increase in the value of subsidiary equity and the government's push for amendments to the Commercial Act. It then raised the target stock price from the previous 6,700 won to 9,600 won, maintaining an 'buy' investment opinion. The closing price of Hyundai G.F Holdings on the previous trading day was 7,810 won.
NH Investment & Securities estimated that Hyundai G.F Holdings' consolidated revenue for the second quarter of this year would be 2.0567 trillion won, a 1% decrease from the previous year, and operating profit would be 93.1 billion won, a 25% increase from the previous year. Lee Seung-young, a researcher at NH Investment & Securities, noted, "The profit growth is expected to be due to the connection of performance with Hyundai Ezwel and the improvement of profitability in subsidiaries like Hyundai Green Food."
Hyundai Home Shopping is expected to see a slight improvement in profitability due to an increase in the proportion of high-margin products, while Hyundai Green Food is anticipated to perform well due to increased meal prices and demand for school meals. Hyundai LIVART's profit decline is expected to be limited due to built-in profit margins and improvements in mix, despite a reduction in business-to-business (B2B) size.
The researcher pointed out that raising the target stock price for Hyundai G.F Holdings was due to factors such as ▲ the rising value of subsidiary equity ▲ expectations for the re-evaluation of the value of the Apgujeong District 3 commercial site ▲ the government's efforts to activate capital markets through the push for amendments to the Commercial Act. The discount rate compared to the target net worth (NAV) decreased from 35% to 30%.
The researcher said, "Strengthening subsidiary control and expanding high-visibility shareholder return policies are also factors that contribute to the reduction of the discount rate compared to NAV," and added, "The current stock price is at a 43% discount compared to NAV, and the company's trend of reducing the discount rate is expected to continue."