April 26, 2024

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[THE INVESTOR] Shinsegae’s third-quarter earnings were a surprise and its earnings from duty-free business will gain momentum, said NH Investment and Securities on Nov. 7, maintaining a “buy” recommendation and raising the target price to 320,000 won (US$287.85) from 300,000 won.

Its revenue reached 1.81 trillion won with operating profit of 74.3 billion won, widely beating market consensus, said analyst Lee Ji-yeong.

Operating profit from department stores rose 8 percent on-year as sales and administration cost effectiveness improved. Its loss from online channels shrank, while duty-free sector’s operating profit came in at 9.7 billion won, explained the analyst. 

As there is no plan to open a new department store this year, the cost effectiveness will further improve and Shinsegae’s profits will advance markedly from the second half of this year, forecast Lee. 

Profitability of duty-free sector will increase even further, according to the analyst.

Its stock price is attractive at 9.5 times of its price-earnings ratio, added Lee counting Shinsegae as a “top pick.”

By Hwang You-mee (glamazon@heraldcorp.com)