Samsung Securities has lowered its target price for E-Mart to 81,000 won, citing decreased visibility for performance recovery due to poor results from key subsidiaries. The investment rating remains at 'buy.'
In a report released on November 12, analyst Baek Jae-seung noted that SCK Company, which turned to a loss in the second quarter, has seen its deficit widen due to ongoing revenue struggles. Additionally, Shinsegae Construction has also reported increased losses due to impairment losses from the initiation of discounted sales at unsold properties, reflecting overall poor subsidiary performance.
Baek stated, "SCK Company must demonstrate successful marketing efforts in the fourth quarter to gauge performance recovery, indicating a lack of visibility for subsidiary results. However, given that competitors like Homeplus are struggling to regain operational strength, we expect E-Mart's core business performance to continue improving due to reduced competition."
E-Mart's consolidated revenue for the third quarter reached 7.5 trillion won, a 1.2% increase from the same period last year. However, operating profit plummeted by 69.6% to 46.1 billion won, falling 71% short of market expectations. Baek remarked, "The hypermarket sector recorded a same-store sales growth of 10.6%, benefiting from a low base and reduced competition."
He added, "The recovery of subsidiary performance and improvements in financial structure will be key points to watch going forward."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.