IBK Securities noted on the 26th that attention should be paid to the potential for performance growth for LOTTE HIMART. This is based on the expectation that related product sales will show a strong performance as it enters the seasonal peak. Accordingly, the investment opinion remains 'buy', with a target price of 9,000 won. The previous day's closing price for LOTTE HIMART was 8,110 won.
IBK Securities estimated LOTTE HIMART's second-quarter revenue and operating profit for this year at 603.3 billion won and 12.2 billion won, respectively. Nam Seong-hyeon, a researcher at IBK Securities, explained, "The basis for performance growth lies in the effects of direct employment of promotional staff, which are limiting declines in sales at existing stores, alongside the seasonal peak and positive sales of related products, as well as the effects of streamlining inefficient stores becoming evident."
He further analyzed, "Despite the sluggish economic situation, declines in sales at existing stores are seen as limited, which can be interpreted as a result of restructuring and the increased professionalism of sales personnel," and noted that "seasonality has become more pronounced since June, and with improvements in profitability due to an increase in high-margin products, growth is deemed possible."
The effects of the supplementary budget are also anticipated. In 2020, the government used 300 billion won in support funds for energy-efficient home appliances to stimulate domestic consumption. It is known that the number of recipients for refunds on high-efficiency appliance purchases was around 2.21 million. During the period from May to July of that year, the retail sales growth rates for home appliances were 12.7%, 24.7%, and 12.5%, respectively, while in April of the same year, the growth rate was limited to 6.7%.
Researcher Nam stated, "As a refund support fund of 326.1 billion won is planned for this supplementary budget, approximately a 9% increase from that time, the related effects will be even greater," adding, "The retail sales growth rate for home appliances this year has continued to show sluggish trends, recording -7.5% in the first quarter and -10.6% in April, making it a good time to expect effects from the supplementary budget."