[THE INVESTOR] Shinsegae’s stock price will continue to rise as its earnings from duty-free business rise, said Shinhan Investment on April 12, maintaining a “buy” recommendation and raising the target price to 450,000 won (US$421.90) from 410,000 won.
Its operating profit in the first quarter will jump 42.4 percent on-year to 110.5 billion won, largely propelled by duty-free business which made 8 billion won profit, said analyst Park Heui-jin. Revenue will rise 12.5 percent on-year to 1.99 trillion won, she estimated.
From the second quarter, earnings will maintain an upward momentum reflecting revenue from its new duty-free store. In particular, earnings from T1, which it acquired last month, and its downtown duty-free store in Busan will be reflected. Moreover, the retail giant plans to open a branch in southern Seoul in July. The new outlets will further boost its growth momentum, while its valuation is relatively more attractive than rivals, said the analyst.
By Hwang You-mee (glamazon@heraldcorp.com)