E-mart "Upgrade to Neutral, risk/reward more balanced" (Neutral) Choi

Research evidence excerpt

E-mart "Upgrade to Neutral, risk/reward more balanced" (Neutral) Choi

ct sourcing integration. SSSG reached 2% for hypermarkets

From To % ch Cons.

and 3.1% for Traders despite one fewer holiday, as stronger Lunar Year demand more 12/26E 8,596 8,732 2 9,005

than offset the calendar impact. Supermarket and SCK SSSG also recovered to 3.7% 12/27E 9,209 11,457 24 12,206

and 4.0%, respectively, supported by improving consumption spending. Other 12/28E 12,864 15,870 23 15,011

subsidiaries also delivered largely in-line results, excluding the disposal impact from

Shinsegae Food's group catering business. However, NP missed expectations due to Jaehyung Choi

larger than expected losses at G-market. Analyst

jaehyung.choi@ubs.com

+82-2-3702 8172

Offline / online business recovery remains key for re-rating

Juseong LeeDespite the recent recovery in consumer spending and solid earnings across the retail

Analyst

sector, Emart's re-rating remains constrained by larger-than-expected losses at online juseong.lee@ubs.com

business. We believe meaningful restructuring at Homeplus and profit recovery in E- +82-2-3702 8106

mart's core hypermarket and offline channels, or a meaningful turnaround in the online

business, will be key drivers for multiple re-rating. However, we expect the pace of

Homeplus restructuring to remain slower than market expectations due to difficulties in

finding potential buyers. In addition, online competition continues to intensify, while

Coupang's business normalization is progressing, making a near term re-rating difficult.

Valuation: trading at 9x 2027E PE vs historical range of 6-19x since 2011

We raise our 2026E/27E/38E EPS by 2%/24%/23%, reflecting the positive impact of a

faster-than-expected recovery in domestic consumption on earnings across all business