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The Korea Herald
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THE INVESTOR
March 29, 2024

Stocks & Bonds

[EQUITIES] ‘Shinsegae Food faces slow industry’

  • PUBLISHED :August 28, 2018 - 10:29
  • UPDATED :August 28, 2018 - 10:29
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[THE INVESTOR] Shinsegae Food’s third-quarter earnings will remain slow due to personnel costs and slow dining industry, said KB Investment and Securities on Aug. 28, lowering the target price to 155,000 won (US$139.64) from 170,000 won.




Its revenue in the period will stand at 323.8 billion won, up 0.9 percent on-year, while operating profit will decline 9.7 percent to 8.4 billion won. For its earnings to improve, it needs to shrink personnel costs in institutional food service sector, but minimum wage hike combined with sluggish dining division will weigh down its bottom line, estimated analyst Park Ae-ran.

The food distribution unit, however, will partially recover from Chuseok holiday effect and food processing department, with an operating profit margin up to 4 percent point higher than the company average, will continue to rally. The uncertain environment could curb investor sentiments for the time being, but the high-margin food processing business still has growth potential, said the analyst maintaining a “buy” recommendation. 

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

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