"Dominant Department Store"... Shinsegae Expected to Post Record-High Results This Year [Click e-Stock]

On May 21, NH Investment & Securities raised its target price for Shinsegae from 570,000 won to 660,000 won, projecting record-high results for the company this year. The investment opinion remains 'Buy'.

In a report released that day, Younghoon Joo, an analyst at NH Investment & Securities, stated, "In the first quarter, Shinsegae canceled 200,000 shares of its treasury stock and currently holds the largest proportion of treasury shares (7.2%) among retail companies." He added, "With the third amendment to the Commercial Act making the retirement of treasury shares mandatory, we proactively changed our valuation method from the total number of issued shares to the number of outstanding shares, subtracting all treasury shares."

Shinsegae's consolidated sales for this year are expected to reach 7.1752 trillion won, up 2.5% from last year, with operating profit forecast at 735.5 billion won, a 53.2% increase. While department store industry sales are showing steep growth, Shinsegae is benefiting from the renovation of key locations. For the duty-free business, the profitability of downtown stores is rebounding, and with withdrawal from the DF2 zone business, it is expected to transform into an operation generating annual operating profit of around 100 billion won.

Joo noted, "Currently, in the consumer goods sector, investors are highly interested in the asset effect and the increase in foreign visitors to Korea." He continued, "Shinsegae is expected to benefit most strongly from sales, based on its two main pillars of department stores and duty-free shops."

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