[Edaily Reporter Kim Kyung-eun ] On the 26th, SKSecurities raised its target price for HYUNDAI G.F. HOLDINGS(005440)by 11.1%, from 18,000 won to 20,000 won, citing that the rising value of its stake in HYUNDAIDEPARTMENTSTORECO.,LTD and favorable shareholder return policies are expected to be reflected in the stock price. The firm maintained its “Buy” rating.

Choi Kwan-soon, an analyst at SKSecurities, stated in a report released that day, “We are at a point where the rise in HYUNDAIDEPARTMENTSTORECO.,LTD’s stock price will lead to a rise in HYUNDAI G.F. HOLDINGS’ stock price.”

HYUNDAIDEPARTMENTSTORECO.,LTD’s stock price has risen 146.8% since the end of March, outperforming the KOSPI’s 76.8% gain over the same period. This is attributed to strong performance in the department store and duty-free businesses driven by an increase in foreign tourists following a rise in the exchange rate. Consequently, the firm expects the stock price of HYUNDAI G.F. HOLDINGS, the largest shareholder of HYUNDAIDEPARTMENTSTORECO.,LTD, to rise as well.

Analyst Choi explained, “HYUNDAI G.F. HOLDINGS has been steadily increasing its stake in HYUNDAIDEPARTMENTSTORECO.,LTD, raising its ownership from 32.2% last year to the current 37.2%,” adding, “The proportion of HYUNDAIDEPARTMENTSTORECO.,LTD within HYUNDAI G.F. HOLDINGS’ net asset value (NAV) has also risen from 38.7% to 58.4%.”

He continued, “Due to the increased stake in HYUNDAIDEPARTMENTSTORECO.,LTD and the rise in its stock price, HYUNDAI G.F. HOLDINGS’ NAV increased by 56.0%, from 1.6 trillion won to 2.5 trillion won,” but noted, “The stock price, however, rose by only 7.9% over the same period.”

The outlook is that the premium associated with shareholder returns will also be reflected in the stock price. Analyst Choi stated, “HYUNDAI G.F. HOLDINGS plans to repurchase 100 billion won worth of its own shares this year,” adding, “From February to April, the company repurchased 3.42 million shares (50 billion won, 2.2%), and plans to repurchase an additional 50 billion won (2.2% of the current share price) worth of shares starting in August. “Once the share buyback is completed in the second half of the year, the shares are scheduled to be canceled,” he said.

He noted, “HYUNDAI G.F. HOLDINGS is currently conducting a comprehensive stock swap to make HYUNDAI HOME SHOPPING NETWORK CORPORATION a wholly-owned subsidiary,” adding, “In this process, considering HYUNDAI HOME SHOPPING NETWORK CORPORATION’s dividend per share (DPS) and the stock swap ratio, the company plans to set the 2026 dividend per share at 441 won (a dividend yield of 3.0% based on the market price).” He further noted, “Total shareholder returns for 2026, including the share buyback and dividends, will amount to 7.4%,” and expressed the view that “this favorable shareholder return policy is not being reflected in the stock price.”

Analyst Choi stated, “The comprehensive stock swap with HYUNDAI HOME SHOPPING NETWORK CORPORATION, currently underway, is in its final stages. Following this, we plan to proceed with the demerger of HYUNDAI HOME SHOPPING NETWORK CORPORATION and the subsequent merger of the investment company formed after the demerger with HYUNDAI G.F. HOLDINGS,” He added, “This is expected to yield positive effects, including increased liquidity through a rise in the number of HYUNDAI G.F. HOLDINGS’ outstanding shares, expanded dividend income through the incorporation of Hyundai Futurenet and HandsomeCorporation as subsidiaries, and the resolution of HYUNDAI BIOLAND Co.,Ltd.’s restrictions on corporate actions.”