[EQUITIES] ‘GS Retail slows down in Q3’
[THE INVESTOR] GS Retail will post slow profits in the third quarter, said Hanwha Investment and Securities on Sept. 25, lowering the target price to 36,000 won (US$31.82) from 45,000 won while maintaining a “hold” rating.
Its revenue will rise 11.4 percent on-year to 2.21 trillion won but operating profit will drop by 16 percent to 71.6 billion won, dragged down by limited growth from convenience store chain business and sluggish hotel sector, said analyst Nam Seong-hyeon.
Convenience stores in particular will have a hard time improving profitability as existing stores’ growth rate suffers from aggressive openings and the company bears costs from “customizing” branches, noted the analyst.
Approximately 400 more branches will open in the third quarter and for existing outlets to recover their revenue, the oversupply should be regulated, added Nam.
By Hwang You-mee (glamazon@heraldcorp.com)