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[Alpha Biz=(Chicago) Reporter Paul Lee] Korea Investment & Securities diagnosed GS Retail on the 7th that the continued increase in convenience store operating profit is positive. Investment opinion 'buy' and target stock price remained at 35,000 won.
GS Retail's consolidated sales in the fourth quarter of last year rose 2.9 percent year-on-year to 2.9317 trillion won, and operating profit fell 13.7 percent to 91.4 billion won over the same period, in line with market expectations.
"It is positive that the operating profit of the convenience store division is better than expected," Korea Investment & Securities said. "This is thanks to the cost reduction that has continued since the third quarter of last year, and this is partly due to the decrease in the portion of lease at the headquarters, which is more expensive than that of store owners."
Korea Investment & Securities judged that the convenience store business is currently in a turnaround phase. "GS Retail posted a net increase in 942 stores last year and plans to continue its net increase in more than 800 stores this year," he said. "We estimate that sub-businesss with insufficient financial power have not been able to aggressively open their stores recently."
Korea Investment & Securities added, "The reorganization of the convenience store market is proceeding rapidly, which is positive for GS Retail, the top operator."
AlphaBIZ 폴 리(hoondork1977@alphabiz.co.kr)
