[Click eStock] "Shinsegae, Impact of COVID-19... Cautious About First Half Performance"

Yuanta Securities Issues 'Buy' Investment Rating and Sets Target Price at 390,000 KRW... Closing Price on 13th at 293,000 KRW

[Asia Economy Reporter Geum Bo-ryeong] There is a cautious analysis regarding Shinsegae's performance in the first half of the year due to the impact of COVID-19.

According to Yuanta Securities on the 14th, Shinsegae's consolidated sales for the fourth quarter of last year reached 2.6872 trillion KRW, with an operating profit of 194.6 billion KRW. This represents an increase of 7.1% and 45% respectively compared to the previous year, surpassing the consensus estimate (155.3 billion KRW).

In particular, a one-time gain of 53.7 billion KRW from the duty-free sector contributed to the surprise results. The operating profit included a reversal of 44 billion KRW due to the reduction of right-of-use assets related to lease accounting and a decrease in depreciation expenses, as well as a patent fee reversal of 9.7 billion KRW. Duty-free sales amounted to 868.1 billion KRW, with an operating profit of 71 billion KRW, showing growth of 34.6% and a return to profitability compared to the previous year.

The first half of the year remains a cautious situation. Lee Jin-hyeop, a researcher at Yuanta Securities, stated, "Department stores were somewhat affected by the COVID-19 situation but are currently entering a stage where traffic is recovering, whereas duty-free stores are still in turmoil. Due to COVID-19, duty-free sales have decreased to about 35-45% of previous levels," adding, "Since this is a natural disaster, it is cautious to make premature predictions, but considering that the base of the duty-free industry will rise from the second quarter, it is expected that fundamentals may be affected to some extent until the second quarter. It is judged that volatility will continue for the time being depending on external conditions."

Yuanta Securities has given Shinsegae a 'Buy' rating with a target price of 390,000 KRW. The closing price on the 13th was 293,000 KRW.

This content was produced with the assistance of AI translation services.