[Click eStock] "Shinsegae Inter expected to achieve record quarterly performance... Strong buy"

[Asia Economy Reporter Ji Yeon-jin] Meritz Securities announced on the 18th that it expects Shinsegae International to achieve its highest quarterly performance based on strong clothing sales and normalization of cosmetics, recommending a buy rating and a target price of 50,000 KRW.

The company’s sales for the second quarter of this year are expected to reach 383 billion KRW, a 12.4% increase compared to the same period last year, with operating profit and net profit projected to increase by 44.2% and 64.2% respectively, reaching 38.2 billion KRW and 31.3 billion KRW. These figures exceed market expectations. During this period, clothing sales (227.2 billion KRW) and operating profit (30.2 billion KRW) are expected to increase by 16.6% and 75.9%, respectively. Cosmetics sales (87.4 billion KRW) are expected to rise slightly by 4.5%, but operating profit (9.2 billion KRW) is anticipated to decrease by 14.4%.

Hanuri, a researcher at Meritz Securities, stated, "The base effect burden from Vidi Vici will be eliminated starting from the third quarter of this year," and added, "the combined sales of Vidi Vici, Yeonjak, Roybi, and Ppure are expected to decrease by 8.7% in the second quarter of this year but increase by 2.3% in the third quarter."

Researcher Han said, "Shinsegae International is realizing structural growth based on attracting new brands and streamlining loss-making businesses," and "with earnings growth easing valuation pressure due to stock price adjustments, the 12-month forward price-to-earnings ratio (PER) stands at 8.1 times, recommending an active buy approach."

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