April 26, 2024

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[THE INVESTOR] Shinsegae will benefit as the duty-free industry regains momentum, said NH Investment and Securities on Aug. 31, maintaining a “buy” recommendation and 550,000 won (US$494.03) target price. 

As of August, daily revenue from its duty-free store in central Seoul reached 5.8 billion won, returning to the level recorded in March. This follows the return of Chinese tourists in large numbers. A total of six cities in China have lifted a ban on group tours to Korea that was in place and could expand further. Sales at Shinsegae’s new duty-free outlet are solid and losses could be smaller than expected. Investments in all sectors have been completed and it will begin to reap benefits from next year, said analyst Lee Ji-yeong.

After fully reflecting earnings from its new duty-free store, revenue and operating profit will reach 3.5 trillion won and 90 billion won in 2019, respectively. In 2020 the figures will stand at 3.9 trillion won and 200 billion won, the analyst estimated, adding that operating value of the sector will expand to 4 trillion won in the long term. 

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