[Click eStock] "Shinsegae International, Momentum Improvement Begins"

DB Financial Investment Issues 'Buy' Rating and 230,000 KRW Target Price... Closing Price on 7th at 141,000 KRW

[Asia Economy Reporter Kum Boryeong] An analysis has emerged that the momentum improvement of Shinsegae International has begun.

According to DB Financial Investment on the 8th, despite the strengthening of social distancing due to the novel coronavirus infection (COVID-19), Shinsegae International's import growth has remained steady.

Sales of luxury contemporary brands such as Celine, Chloe, Maison Margiela, and Acne have grown by 30-40% compared to the previous year, and the shift in demand from duty-free channels to department store channels appears to be driving sales growth. In addition, customer traffic is steadily increasing on its own mall SI Village, which is also positive in terms of channel mix improvement.

Park Hyunjin, a researcher at DB Financial Investment, explained, "Underperforming brands such as GAP and Design United, both domestically and internationally, are reducing fixed cost burdens by eliminating inefficient sales factors, and cost efficiency efforts are expected to be actively implemented for some women's clothing brands where sales growth is difficult."

Cosmetics, which have a high profit ratio, are also expected to show performance improvement in the third quarter compared to the second quarter. It is understood that Vidi Vici's duty-free sales increased by more than 40% in July and August compared to April and May. Researcher Park said, "Yeonjak seems to be steadily maintaining monthly sales of 2 to 3 billion KRW across all channels," adding, "Sales in the Chinese T-MALL domestic market will continue to contribute to sales in the second half of the year, coinciding with China's large-scale online shopping events."

Lifestyle brand JAJU is expected to maintain an operating profit trend thanks to sales recovery despite increased fixed costs due to road shop openings.

DB Financial Investment gave Shinsegae International a 'Buy' investment opinion with a target price of 230,000 KRW. The closing price on the 7th was 141,000 KRW. Researcher Park analyzed, "As the restructuring of underperforming businesses continues to reduce cost burdens, performance improvement is expected in high-profit sectors such as cosmetics, making this a period where positive factors are expected to outweigh negative ones."

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