April 20, 2024

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[THE INVESTOR] Shinsegae’s duty-free stores remain on an upturn, said NH Investment and Securities on Sept. 18, maintaining a “buy” recommendation and 550,000 won (US$487.98) target price. 

Its domestic branches are maintaining firm growth on the back of it being a high season and recovering inbound tourism. The commission rate of its Myeong-dong store, which accounts for a major part of its profits, is also declining gradually. The newly opened branch is doing well, generating revenue close to its target amount. The duty-free sector will be able to post 3 trillion won in annual total revenue and 60 billion won operating profit this year. The figures will grow to 4 trillion won and 100 billion won next year and by 2020 could reach 4.5 trillion won and 200 billion won, respectively, said analyst Lee Ji-yeong.

Following its investments in all businesses except online channel, the retailer will begin to make profits from 2019, said Lee recommending to purchase its stocks.

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