[Click e Stocks] Shinsegae, Is Spring Coming to Duty-Free Shops Too?

[Asia Economy Reporter Junho Hwang] Kiwoom Securities maintained Shinsegae's target stock price at 440,000 KRW on the 17th, expecting a rebound in duty-free shop demand.

The previous day, Shinsegae's stock price rose more than 3% on expectations of a rebound in Chinese consumer sentiment. The cumulative retail sales data for January to February released on the 15th showed better-than-expected results (overall 6.7%, cosmetics 7.0%), and the significant impact came from the Chinese government's announcement of adjustments to quarantine policies, including easing criteria for COVID-19 patient discharge/isolation release. Also, expectations for economic stimulus measures by Vice Premier Liu He were reflected. Additionally, news that the Korean government plans to exempt vaccinated arrivals from mandatory self-quarantine starting on the 21st also influenced the market.

Kiwoom Securities judged that domestic demand for overseas travel is likely to gradually rebound from next month. They expect a sales rebound at airport duty-free shops from the second quarter of this year due to the recovery in outbound travel demand by domestic travelers. In February this year, the number of international passengers at Incheon Airport decreased by 94% compared to the same month in 2019. A similar trend is expected this month as well. However, the first quarter duty-free shop performance is expected to contract compared to the fourth quarter of last year due to strengthened quarantine policies in China ahead of the Winter Olympics.

Researcher Sanghoon Park of Kiwoom Securities stated, "While department stores continue to show steady sales trends, the rebound in Chinese consumer sentiment and recovery in overseas travel demand increase the possibility of a recovery in duty-free shop demand." He added, "In particular, depending on the speed of demand recovery, it is judged that upward revisions to earnings estimates for duty-free shops will be possible."

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