[THE INVESTOR] Shinsegae failed to meet market expectations in the second quarter, said eBEST Investment and Securities on Aug. 9, lowering the target price to 465,000 won (US$415.44) from 530,000 won while maintaining a “buy” recommendation.
Its operating profit in the period almost doubled but was below market consensus. Shinsegae DF’s strong revenue has served as a momentum for both earnings of the whole company and stock price, but in the latter half will slow down temporarily, said analyst Oh Rin-a.
Trade conflicts between the US and China could devalue the yuan affecting private shuttle traders in the second half, while new duty-free stores may further intensify competition. The fast recovery of inbound tourism from China could offset these concerns but is likely to take longer. Closing down its department store in Incheon next year could also hurt its earnings, added the analyst.
By Hwang You-mee (email@example.com)