[Click eStock] Shinsegae International, Operating Profit Soars 'Buy Timing'... Target Price Up 9%

[Asia Economy Reporter Lee Seon-ae] Meritz Securities maintained its 'Buy' rating on Shinsegae International on the 9th and announced a 9% increase in the target price to 240,000 KRW.

Hanuri, a researcher at Meritz Securities, explained, "The target price is raised by applying a 12.7% increase in the expected earnings per share (EPS) volatility for this year," adding, "Operating profit is expected to increase by 86.6% this year, and in the cosmetics sector, growth is anticipated due to the consolidation of Swiss Perfection in Q1 and the launch of new brands in Q2." Researcher Han further stated, "In the case of clothing brand Joosun, profitability improvement is expected due to offline efficiency, so stock price adjustment is necessary," and added, "While the cosmetics sector's price-earnings ratio increased by 20.8%, Shinsegae International's decreased by 12%."

Meanwhile, Shinsegae International recorded sales of 383.6 billion KRW (-3.5% YoY), operating profit of 17.4 billion KRW (-19.8%), and net profit of 24.7 billion KRW (+30.3%) in Q4 2020, exceeding market expectations. The strength of foreign brands was effective. Both cosmetics (import sales +80.4%) and clothing (overseas fashion operating profit +59.0%) showed growth.

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