[Click eStock] "Shinsung Tongsang, Reassessment Needed for Upgraded Brand Value"

[Asia Economy Reporter Hyunseok Yoo] SK Securities analyzed on the 8th that it is time to reassess the upgraded brand value of Shinseong Tongsang. No investment opinion or target price was provided.

Shinseong Tongsang is a clothing specialist company that owns brands such as Topten (TOPTEN10), Korea's representative SPA (Specialty store retailer of Private label Apparel) brand, as well as Giozia, Olzen, and And Z. As of last year (based on the fiscal year ending in June), it recorded sales of 1.0272 trillion KRW and an operating profit of 39.8 billion KRW.

SK Securities analyzed that Shinseong Tongsang's flagship brand, Topten, is continuously growing. Researcher Seungdoo Na of SK Securities said, "It is a reflection effect of anti-Japanese sentiment triggered by the Korea-Japan conflict," adding, "As a result, Japanese brands represented by Uniqlo experienced an overall decline in sales, which is still ongoing, and the competing brand Topten has seen significant reflective benefits." He further added, "In fact, Shinseong Tongsang's sales, which were about 800 billion KRW in 2018, exceeded 1 trillion KRW last year."

He also evaluated that the growing movement toward the recovery of daily life after COVID-19 had a positive impact. He explained, "Although it is true that the number of new confirmed cases due to the COVID-19 Delta variant is increasing rapidly recently, considering that the vaccination rate is steadily rising and the proportion of severe cases due to variants is decreasing, the normalization of daily life is not a story of the distant future," and added, "While consumer interest in luxury has greatly increased after experiencing COVID-19, on the contrary, consumer consumption tendencies for cost-effective mid-to-low priced products remain robust, which is a positive environment for SPA brands."

He said, "The spread of COVID-19 has imposed many restrictions on general consumption activities, but conversely, it has led to increased consumption focus on children," and added, "Topten Kids is also showing a gradual growth trend and demonstrates brand competitiveness that is not inferior compared to other kids' brands."

Researcher Na emphasized that as Shinseong Tongsang grows due to these reasons, a reassessment of its brand value is necessary. He stressed, "Although about two years have passed since the Korea-Japan conflict was triggered, interest in domestic SPA brands, which was thought to be a one-time factor, continues and is reflected in performance," and emphasized, "It is time to reassess the upgraded brand value."