SOUTH KOREA FIRST TO MARKET

Research evidence excerpt

SOUTH KOREA FIRST TO MARKET

Asia Pacific Equity Research

South Korea First to Market 14 July 2026

Top Stories

Init | Korean Department Stores (DS Kim/Benjamin Kim)

Getting wealthier faster than they can spend; initiate on Shinsegae/HDS at OW, Lotte at N

Department store stocks have more than doubled in a year. Same-store sales have gone from zero to ~25% growth in a little

over a year. The cause is the region’s least-kept secret — a KOSPI up 3x from its 2025 low, leaving households much wealthier

on paper. The obvious pushback is that we are late. We agree, knowingly. But the real debate is not whether the story is known;

it is whether the market is paying for the duration and earnings level still to come. Our FY27E OPs sit 7–13% above Street, and

our work says the cycle is closer to mid-game than end-game – yet these stocks trade at only 9.8x 2027E P/E. We initiate on

Shinsegae/HDS at Overweight and Lotte Shopping at Neutral.

Ecopro BM (Sonny Lee) (247540 KS, N)

Indonesia nickel upstream (BNSI) factored in, and appears value-dilutive; stay Neutral

Ecopro BM (EBM) will deploy most of its rights issue proceeds (~W0.77tn of W1.2tn) to acquire a ~20% stake in Indonesia’s

Bahodopi Nickel Smelting Indonesia (BNSI) nickel mining/smelting project, with production guided from 2027. We view this as

value-dilutive: even on the bullish case guided by the company, ~W0.6tn 2028 EBITDA implies ~W3.6tn EV at 6x EV/EBITDA,

or ~W0.72tn for the 20% stake (before any net debt), below the ~W0.77tn investment; our moderate case implies materially

lower value. Upstream integration also adds nickel price/policy risks and reduces flexibility to shift the product portfolio to

Lithium Iron Phosphate (LFP) . Maintain Neutral; Dec-27 PT of W120,000 based on SOTP.