[THE INVESTOR] Shinsegae International is maintaining a sharp earnings growth momentum and losses of its subsidiaries are shrinking, said KB Investment and Securities on Nov. 15 maintaining a “buy” recommendation and 240,000 won (US$212.01) target price.
Its operating profit in the third quarter increased 1161.1 percent on-year to 11.5 billion won and revenue by 16 percent to 311.8 billion won. Operating profit on a standalone basis surged 206.7 percent on-year to 15.2 billion won demonstrating that the main business remains solid. Cosmetics sales gained 3.5 percent from the previous quarter while rate of cost to sales declined through fully internalizing production of Vidi Vici range, said analyst Ha Nu-ri.
Operating profit from apparel sector came in at 900 million won, a dramatic improvement from 400 million won loss from a year ago. Its subsidiaries including Tomboy and Paul Poiret showed noticeable improvement with shrinking losses. Its current stock price has tumbled 40 percent from the previous peak due to shrinking investor sentiments but its earnings are advancing and the price fall is excessive, said the analyst.
By Hwang You-mee (firstname.lastname@example.org)