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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Minyoung] Korea Investment & Securities stated on the 16th that the increased likelihood of bankruptcy for Tmon and WEMAKEPRICE could lead to reduced competition in the retail market, which would likely benefit E-Mart. The target price and buy recommendation for E-Mart remain unchanged at 105,000 KRW.
The firm noted that despite the KOSPI dropping 7.4% over the past month, E-Mart’s stock has risen by 6.0%. The potential bankruptcy of Tmon and WEMAKEPRICE is expected to ease retail market competition, while the end of the yen depreciation has negatively affected Japanese travel demand, positively impacting the stock.
Korea Investment & Securities pointed out that Tmon and WEMAKEPRICE together hold an estimated market share of about 1.5%. Even if they do go bankrupt, it is unlikely to significantly improve traditional retailers’ performance. However, a reorganization of the online market could lead to reduced competition in the retail sector, which would be positive for traditional retailers' valuations.
The firm also mentioned that domestic food consumption demand has not recovered as expected in the first half of the year, negatively affecting E-Mart’s same-store sales. However, it anticipates increased food consumption demand in the second half of the year, leading to continued positive stock performance.
Overall, Korea Investment & Securities is optimistic about the improved supply conditions for the retail sector and expects E-Mart’s performance to improve more quickly than the market anticipates.
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
