New license sends shares of Hanwha up by 180%

Home > Business > Industry

print dictionary print

New license sends shares of Hanwha up by 180%

Shares of Hanwha Galleria Timeworld jumped by the daily limit of 30 percent on Wednesday, continuing a massive rally for a fourth consecutive session. The company was picked last Friday to receive one of the new licenses to run a duty-free shop in Seoul. But the perhaps premature start of the boom triggered an investigation by the Korea Exchange into alleged insider trading.

Hanwha Galleria shares have gained 183 percent since the market’s close last Thursday. Beginning Friday morning, they have hit the 30 percent limit, or come within a percentage point of doing so, every trading day. The shares ended Wednesday’s session at 170,000 won ($148); at Thursday’s close, they sold for 60,000 won.

Hanwha Galleria’s market capitalization has increased to more than 1 trillion won from 360 billion won, and it has become the 190th largest issue on the Kospi. According to Korea Exchange data, the company ranked 314th before beginning its bull run last week.

“After securing the license, Hanwha Galleria Timeworld has gotten the opportunity to firm up its position as a duty-free store operator,” said Yang Ji-hye, an analyst at KB Investment & Securities. “In the medium- to longer-term, the duty-free business will become Hanwha Group’s new growth engine.”

Hanwha’s city duty-free store is scheduled to open in January at the 63 Building, a landmark in Yeouido owned by Hanwha Life. It operates a duty-free shop at Jeju airport, but sales there were a relatively modest 48.5 billion won in the 2014 fiscal year.

Industry observers estimate the new duty-free outlet will bring Hanwha at least 260 billion won and as much as 600 billion won in sales when it opens early next year. If those estimates are correct, the new store would easily double Hanwha Galleria Timeworld’s annual sales, which stood at 160 billion won last year according to regulatory filings.

Lotte’s central Seoul duty-free shop, which occupies three floors of its department store, generated about 2 trillion won in sales last year.

But the rally in Hanwha Galleria shares - which began many hours before the official announcement of the decision by the Korea Customs Service to award it a license - has raised allegations of insider trading.

The company’s shares opened sharply up on Friday, but the Customs Service announcement came later in the afternoon, well after the stock market closed that day. The Korea Exchange said it had started an investigation into those allegations. Hanwha said it believed the focus was on possible leaks at the customs agency.


BY PARK JUNG-YOUN [park.jungyoun@joongang.co.kr]

More in Industry

Stores in malls fear change to retail law

Robofork

Big business recoils at new legal legislation

Hyundai Mobis has developed a hydrogen-powered forklift

Asiana adapts passenger plane to carry more cargo

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now