Report

GS Retail[007070.KS/M.PERFORM] : Shop around for better bargains

We revise down our 2018 earnings forecasts in light of lower-than-expected 1Q18 earnings results. The disappointing results have largely to do with an increase in subsidies paid out to the franchisees of GS Convenience Stores after minimum hourly wages were increased.
- Despite the above negatives, we find the improving earnings of Parnas Hotels positive.
- We maintain Marketperform and our target price of KRW40,000 on GS Retail.

Underlying
GS Retail Co. Ltd.

GS Retail is engaged in the retail business. Co.'s convenience store division provides tobacco, food and other under the brand name LG25. Co. operates its supermarket in the nationwide under the brand name of GS supermarket. Co. also engaged in the donut store business under brand name mister Donut, real estate development and leasing business.

Provider
Hyundai Motor Investment & Securities
Hyundai Motor Investment & Securities

Hyundai Motor Investment & Securities is the investment banking arm of the Hyundai Motor Group. The company offers stock brokerage and advisory services; derivative products brokerage and advisory services; wrap account portfolio management services; and VIP wealth management and tax planning, institutional equities, derivatives, and futures brokerage services, as well as sells investment and institutional products. It also provides equity offering, ABS, real estate PF and real estate PF securitization, offshore SOC, structured financing, asset securitization, real estate sales, IPO advisory, and private equity fund and fund management services; and CMA/RP portfolio management and fixed income based investments, as well as involved in the issuance, management, and brokerage of OTC derivatives. In addition, the company offers research services, including macro economic forecasts and stock market outlook, industry overviews and forecasts, fixed income strategies, corporate credit analysis, and valuation analysis. Further, it offers a range of retirement and pension services for individuals and corporate members; portfolios and asset allocation consulting and marketing services; proposing retirement pension plans; contract and payment management services; pension plan advisory and actuarial services; and system development and implementation services, as well as operates call centers for retirement pension services, etc. 

Analysts
Jong-ryeol Park

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