Shinsegae stocks are still underpriced considering the solid department business, fast-growing duty-free sector and reevaluation of online channel, said NH Investment and Securities on March 8.
The securities firm maintained a “buy” recommendation and 400,000 won (US$374.08) target price saying that its current stock price is only at 12.7 times its price-earnings ratio.
The average daily revenue from its duty-free stores in January and February is 4.9 billion won, a robust result in comparison to 4.5 billion won in the fourth quarter last year, said analyst Lee Ji-yeong.
The duty-free store in the second terminal of Incheon Aiport, which opened in January, is doing well reaping 500 million won sales on average, and if the trend continues, annual revenue from this branch will top 180 billion won, beating initial targets, forecast the analyst.
The retail heavyweight will also complete spin-off and merge online business by the end of this year which will further boost its stock price, added Lee.
By Hwang You-mee (firstname.lastname@example.org