▲ The Hyundai Department Store in Yeouido, Yeongdeungpo-gu, Seoul. (Photo courtesy of Hyundai Department Store Group)
While the stock price of Hyundai Department Store continues to rise day after day despite the scorching heat, the market’s interest is growing as foreign sales are also increasing rapidly. In the market, as the brisk foreign sales are a positive factor for the performance of department stores, it is expected that the stock price will also rise.
According to the Korea Exchange on the 4th, as of 2:39 pm on the same day, Hyundai Department Store is trading at 59,300 won, up 4.59% (2,600 won) from the previous day.
The stock price of Hyundai Department Store fell below the 50,000 won mark on June 21st, but in July, it showed a sharp rebound and is recovering to the level of the end of last year (59,000 won). From last month to this day, the current department store stock price has increased by 18.15%.
In particular, compared to Shinsegae (-8.16%) and Lotte Shopping (-19.21%) in the same distribution industry, Hyundai Department Store’s share price shows a clear trend. Share prices of Shinsegae and Lotte Shopping declined 9.45% and -19.01%, respectively, from the beginning of the year, while Hyundai Department Store rose 0.51%.
In the midst of this, Hyundai Department Store announced on the same day that the proportion of foreign sales in the first half of this year recorded 3% of its total sales. This is a figure that has more than tripled compared to 2022, and the proportion of foreign sales has more than doubled compared to 2019, before the corona epidemic.
In the industry, it is analyzed that contents of differentiated attractions such as The Hyundai Seoul have received great response from foreign tourists. Thanks to this, the growth in foreign sales at major Hyundai Department Store stores, such as ‘Trade Center Store’, which has rapidly emerged as a luxury shopping destination in Gangnam, Seoul, and ‘The Hyundai Seoul’, which is gaining popularity as a hot place for the global MZ generation through social media, is remarkable. Foreign tourists accounted for 16% and 12% of the total sales of Hyundai Department Store Trade Center and The Hyundai Seoul last June, respectively, benefiting greatly from foreign tourists.
The market expects that the increase in foreign sales will have a positive effect on the stock price of Hyundai Department Store in the future. An official from a securities company said, “While domestic consumer sentiment has contracted due to the economic recession, the increase in foreign tourists can be a new breakthrough in the slowing performance momentum of department stores.”
In particular, there are many prospects that it will be a good news for Hyundai Department Store’s stock price in the future, in line with the planned establishment of a single holding company system for Hyundai Department Store Group. Park Shin-ae, an analyst at KB Securities, said, “Along with the increase in foreign sales, the same-store growth rate of the department store division is showing a trend that is superior to that of competitors, and the duty-free division is also expected to record a surplus for the first time in the third quarter.” As the risk has been resolved recently, the rebound in the stock price will continue for the time being.”
Meanwhile, Hyundai Department Store is expected to become a subsidiary of the holding company after the restructuring of its governance structure centering on the holding company, Hyundai GF Holdings, is completed by the end of this year. In the industry, it is expected that active shareholder return policies such as dividend expansion will continue in the future, thanks to the strong sales of Hyundai Department Store and the turnaround in Hyundai Department Store Duty Free Shop performance. In this case, Hyundai GF Holdings, the holding company, is also expected to benefit greatly, such as an increase in dividends from Hyundai Department Store.