Share buyback and cancellation planned through 2028

Brokerages line up with bullish Q3 forecasts on inventory improvements

Hanseom's headquarters building [Hanseom]
Hanseom's headquarters building [Hanseom]

Hanseom, a fashion subsidiary of Hyundai Department Store Group, is drawing investor attention after announcing a medium- to long-term shareholder return policy alongside expectations of an earnings recovery.

According to industry sources Monday, Hanseom disclosed Friday that it had purchased 629,327 of its own shares on the open market and would cancel all of them by year-end. The buyback is valued at 10 billion won ($7.23 million), equivalent to about 3.0 percent of the company's total shares outstanding. Hanseom plans to buy back and cancel 10 billion won worth of its own shares every year through 2028 to enhance shareholder value.

The company also disclosed a broader shareholder return policy, raising the minimum dividend payout threshold from 15 percent to 20 percent of standalone operating profit and increasing the minimum dividend per share from 750 won to 800 won.

The announcements have drawn attention alongside brokerage forecasts pointing to improved third-quarter earnings. NH Investment & Securities projected Hanseom's third-quarter consolidated sales at 332.3 billion won, up 7 percent from a year earlier, with operating profit reaching 10 billion won — a 303 percent increase. The brokerage said in a report that profitability would improve on the back of reduced product inventory in the first half and strong full-price sales of flagship brands such as Time and Mine in September.

Heungkuk Securities also forecast third-quarter consolidated sales of 336.7 billion won and operating profit of 10.4 billion won, representing year-on-year gains of 8.8 percent and 313.7 percent, respectively. Analyst Park Jong-ryeol said household spending on fashion was gradually returning to growth, adding that a positive wealth effect and improving consumer sentiment would further support a recovery in the fashion sector.

NH Investment & Securities raised its target price for Hanseom from 25,000 won to 27,000 won, while Heungkuk Securities lifted its target from 27,000 won to 28,000 won.

Daishin Securities also forecast sales growth driven by strong demand for higher-priced fall and winter products, and said lower inventory levels would help operating profit recover from the previous quarter's weakness. The brokerage projected third-quarter sales at 343.1 billion won and operating profit at 7.4 billion won, maintaining its target price for Hanseom at 30,000 won.


soho0902@heraldcorp.com