"Convenience Store Growth Rate Hits Highest Since 2020... GS Retail Target Price Raised" [Click e-Stock]

On August 11, Hana Securities stated that GS Retail has entered a phase of sustained profitability improvement, raising its target price from 31,000 won to 35,000 won. The investment opinion remained 'Buy'.

Jongdae Park, a research analyst at Hana Securities, wrote in a report the same day, "In the second quarter of this year, GS Retail recorded consolidated revenue of 3.1751 trillion won, up 7% year-on-year, and operating profit of 107.4 billion won, up 27%, exceeding market consensus." He added, "Balanced growth and profitability enhancement in key business areas such as convenience stores, supermarkets, and home shopping are driving strong profit improvement."

By business division, the same-store sales growth rate for convenience stores reached 7.5% compared to the same period last year, marking the highest figure since 2020. Park explained, "This was driven by an increased proportion of sales from foreign customers, expansion of Fresh Convenience Store (FCS) locations, and growth in quick commerce." He noted, "As the burden of fixed expenses eased, the operating margin for convenience stores rose to 3.0%." The supermarket segment also saw a 10% year-on-year increase in revenue, supported by greater contributions from quick commerce.

Park stated, "By reducing poorly performing stores and increasing large FCS stores, which generate 50–60% higher sales than standard stores, GS Retail has enhanced store-level efficiency." He added, "Acceleration of quick commerce centered around the in-house application 'Our Neighborhood GS' is creating synergies between the convenience store and supermarket businesses, further fueling growth."

This content was produced with the assistance of AI translation services.