[Click eStock] "Shinsegae Inter, Target Price Lowered to 18,000 Won↓"

Yuanta Securities maintained its buy rating on Shinsegae International on the 27th and lowered the target price to 18,000 KRW by adjusting the Q2 earnings and the performance of the fashion division.

The Q2 earnings recorded sales of 320.9 billion KRW and operating profit of 13.3 billion KRW, falling short of the market expectation of 15.8 billion KRW in operating profit.

Overseas fashion sales amounted to 99 billion KRW. Excluding discontinued brands, sales are understood to have increased. Sales expansion of new brands continues, and more than three global luxury brands are planned to be launched in the second half of the year.

Domestic fashion sales recorded 61.5 billion KRW. The domestic women's wear market is generally weak due to consumer recession. While domestic fashion brands are declining, the sales growth of the Tomboy brand is a positive factor.

Cosmetics sales reached 105.3 billion KRW, setting a record high. Imported cosmetics are expanding their market share in the domestic perfume market through new brand launches and sales expansion of existing brands. Manufactured cosmetics are strengthening overseas market penetration by expanding global channels.

Jaju recorded sales of 63.3 billion KRW. Sales decreased due to the closure of inefficient stores and inventory optimization, while operating profit slightly increased.

Shinsegae International acquired 373,737 shares (100%) of the cosmetics brand Amuse for 71.3 billion KRW. It is expected to be reflected in consolidated earnings from October. This is a strategy to expand the cosmetics business portfolio, which was previously focused on luxury, to mass brands and to expand the global business. Amuse has secured a customer base in their teens and twenties in North America and Japan. Overseas sales account for 35%. The half-year sales for 2024 are estimated at 25.4 billion KRW, with full-year 2024 sales projected at 54 billion KRW and operating profit at 3.8 billion KRW.

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