April 20, 2024

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[THE INVESTOR] Shinsegae International’s operating profit in the second quarter will be record high thanks to its burgeoning cosmetics business, said Mirae Asset Daewoo on June 27, maintaining a “buy” recommendation and raising the target price 30 percent to 260,000 won (US$232.56).

Its revenue in the period will increase 18.6 percent on-year to 284.0 billion won and operating profit will surge 264 percent to record 16.1 billion won. It will grow evenly company-wide while cosmetics will propel dramatic advance in profits. Its second-quarter operating profit in cosmetics will reach 9.9 billion won and operating margin will be over 20 percent, said analyst Ha Nu-ri.

Its own brand Vidi Vici is strengthening cost efficiency while imported cosmetics are securing stronger margins with high-end lineups. The apparel unit is concentrating on the domestic market and cannot grow systemically but margins will steadily improve. The sector’s operating profit will almost triple to 3.6 billion won from a year ago, the analyst noted.

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