[Feature Stock] Hyundai Department Store, significantly rises due to expectations of improved main business performance… Securities firms maintain target price of 130k won

Modern department stores’ stock prices surged significantly during trading due to expectations of improved performance in their core department store business.

According to data from the Korea Exchange, Modern Department Stores’ stock price temporarily rose to 112.3k won, up 14.01% from the previous trading day. At one point during trading, the increase exceeded 15%, indicating strong buying inflows.

The stock price rally is interpreted as reflecting market expectations for a recovery in profitability within the department store division. The securities industry believes that Modern Department Stores has the highest sales among the three major department store giants in Seoul, with stores exceeding 1 trillion won in sales, and in Gyeonggi Province, the Pyeongchon store holds a dominant sales position.

Keibo Securities previously evaluated in a report that the profit margin of Modern Department Stores’ core department store business is improving significantly. Analysts point out that although the underperformance of subsidiary Zinus is a burden, the recovery trend in the core business’s profitability can largely offset this impact. The investment opinion remains “Buy,” with a target stock price of 130k won.

Expectations of additional improvements in profitability have also contributed to the stock price increase. It is anticipated that some stores, such as “The Hyundai Seoul,” are nearing the end of their depreciation periods, which could ease expense burdens. The company’s cost efficiency improvements and growth across all categories of department stores are also mentioned as factors supporting performance.

Previously, Modern Department Stores has attracted market attention with surprise earnings and expectations of shareholder returns. The improvement in duty-free store performance, the recovery prospects of Chinese tourists, and the potential rebound of subsidiary Zinus’s performance are also mentioned. The expansion of duty-free stores resulting from being selected as the operator of Incheon Airport DF2, as well as the expected synergy effects with existing urban stores, are also viewed as factors for future performance improvement.