[Click e-Stock] "Shinsegae Target Price Raised on 'Triple Boon'"

On April 28, Shinyoung Securities maintained its "Buy" investment rating on Shinsegae and raised its target price from 320,000 won to 500,000 won.

Jungyeon Seo, a researcher at Shinyoung Securities, stated, "We are raising our target price by 56% to 500,000 won, reflecting a 20% increase in our target multiple for the distribution sector and an upward revision of our earnings estimates."

Seo projected that Shinsegae’s first-quarter results this year would improve compared to the previous year. She forecasted that consolidated gross sales and operating profit would reach 3.1339 trillion won and 177.6 billion won, up 8.9% and 33.4%, respectively, year-on-year.

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Specifically, she predicted that department stores, duty-free shops, and Shinsegae International would enjoy strong performances. For department stores, the ongoing industry boom in Korea following the renovation of major locations such as Gangnam and the main branch last year has led to improved results. Seo commented, "We expect total sales and operating profit in the department store division to reach 2.0345 trillion won and 138.1 billion won, up 13.8% and 28.8%, respectively, compared to the same period last year," adding, "The department store segment's strong performance is likely to continue throughout the first half of this year."

She also anticipated that operating profit in the duty-free business would reach between 30 billion and 40 billion won this year, considering the cost savings from exiting the Incheon Airport DF2 zone, which is expected to reduce annual rent expenses by about 120 billion won.

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