Kyobo Securities said on the 14th that E-MART could benefit as Homeplus Co. released a plan to suspend operations. It maintained a Buy rating and lowered the target price to 130,000 won, reflecting an adjustment to the discount rate for unlisted subsidiaries. E-MART's previous day's closing price was 106,000 won.
E-MART posted consolidated results for the first quarter this year of 7.1234 trillion won in revenue and 178.3 billion won in operating profit. Compared with the same period a year earlier, revenue fell 1.3% while operating profit rose 11.9%. Operating profit was in line with the market consensus of 172.6 billion won.
On a separate basis, E-MART recorded total revenue of 4.7152 trillion won and operating profit of 146.3 billion won. Those figures were up 1.9% and 9.8%, respectively, from a year earlier. The subsidiary Starbucks posted revenue of 817.9 billion won, up 7.4% from a year earlier. Operating profit came to 37.7 billion won, down 16.5%.
Jang Min-ji, an analyst at Kyobo Securities, analyzed that "operating profit decreased as 6.6 billion won in expenses related to the humidifier recall were reflected."
In addition, the operating loss at subsidiary SSG.com narrowed quarter over quarter to 21.9 billion won, and Shinsegae Property recorded operating profit of 27 billion won, down 25.8% from a year earlier due to a one-off real estate disposal gain in the first quarter last year. Josun Hotels & Resorts posted revenue of 168.5 billion won and operating profit of 3.9 billion won, up 2.4% and 116.7%, respectively, from a year earlier.
Jang said, "As of April, same-store sales growth was 4.3% for discount stores, 5.1% for Traders, and 9.1% for Everyday," adding, "this is mainly due to the success of events held in April, and we judge that some of the spillover benefit from the closure of competing stores was also reflected."
She added, "As Homeplus Co. released a plan to suspend operations at 37 hypermarkets, if related benefits become visible going forward, earnings momentum will strengthen."