Stocks & Bonds [EQUITIES] ‘E-mart should be approached conservatively’

[THE INVESTOR] E-mart’s third-quarter earnings should be approached conservatively, said Hanwha Investment and Securities on Aug. 30 while maintaining a “buy” recommendation and 300,000 won (US$270.76) target price.

Citing worse-than expected market conditions, analyst Nam Seong-hyeon said shrinking consumption continues to bring down revenue and non-food sectors remains on a downturn. The sweltering heat has also led to issues with fresh food, and discount stores’ growth will be slower than estimated.

The outlook for third quarter is positive due to Chuseok holidays and low baseline from last year. However, limited increase in household income and product price rise due to inflation is hampering sales. September earnings will be temporarily boosted by the major holiday but will set a high baseline, which in addition to slow industry, will drag down the bottom line in the next quarter, the analyst said.