Hyundai Department Store, Lotte Shopping, and Shinsegae stocks declined on the 23rd after reaching price peaks last month, with Hyundai Department Store closing at 139,600 won (up 0.36%), Lotte Shopping falling 4.61%, and Shinsegae dropping 3,000 won (0.55%). The declines followed a period when the three stocks reached highs driven by increased foreign tourist numbers and domestic consumption growth. Analysts attribute the weakness to an adjustment phase following steep price gains and a lack of new positive catalysts in the month, occurring as concerns about a semiconductor sector peak-out have eased.
Three Department Store Stocks Record Sharp Declines from Recent Peaks
According to the Korea Exchange, Hyundai Department Store closed at 139,600 won on the 23rd during regular trading, up 500 won (0.36%) from the previous trading day. Lotte Shopping fell 4.61%, affected by Lotte Group Chairman Shin Dong-bin's stake sale, while Shinsegae dropped 3,000 won (0.55%) from the previous session.
All three companies share the commonality that their stock prices had been at recent peaks. As of the 17th of last month, Hyundai Department Store's closing price broke through the 200,000 won level for the first time but failed to maintain it for long. Shinsegae's closing price on the 3rd of this month was 792,000 won, but it subsequently declined steadily, expanding the decline to 31.31%. Lotte Shopping also broke through the 200,000 won level for the first time last month but fell approximately 39.24% immediately afterward.
Analysts Cite Adjustment Phase Following Steep Gains
Securities industry observers view the recent decline as an adjustment phase following the steep stock price gains of department store stocks. Kim Myung-joo, a researcher at Korea Investment & Securities, stated, "The stock prices of the three department store companies, which showed explosive stock price movements in the first half, are showing adjustments as they enter the second half," adding, "With no additional positive catalysts in the department store industry during the month, stock price volatility is likely to continue for the time being regardless of valuation levels."
Securities Firms Raise Target Prices Despite Short-Term Volatility
However, assessments followed that mid- to long-term stock price momentum remains intact due to solid fundamentals. NH Investment & Securities, DB Securities, Shinhan Investment Securities, Kyobo Securities, and LS Securities, which issued reports on Hyundai Department Store, Lotte Shopping, and Shinsegae this month, raised their target prices compared to previous levels.
FAQ
What happened to Korean department store stocks on the 23rd?
Hyundai Department Store closed at 139,600 won (up 0.36%), Lotte Shopping fell 4.61%, and Shinsegae dropped 3,000 won (0.55%) on the 23rd, following recent price peaks driven by increased foreign tourist numbers and domestic consumption.
Why are department store stocks declining after reaching peaks?
Kim Myung-joo from Korea Investment & Securities stated that the three department store stocks are showing adjustments after explosive movements in the first half, with no additional positive catalysts in the industry during the month, making continued volatility likely regardless of valuation levels.
