[Click eStock] "Shinsegae, Additional Improvement Expected in Duty-Free Store Performance in the Second Half"

NH Investment & Securities maintained its 'Buy' rating and target price of 260,000 KRW for Shinsegae on the 10th, citing a high possibility of further improvement in duty-free store performance in the second half of the year.

Joo Young-hoon, a researcher at NH Investment & Securities, said, "Although the department store and subsidiary Shinsegae International's performance was weaker than expected, the duty-free store offset this by achieving the highest quarterly operating profit ever," adding, "Even considering only the value of the duty-free store, the current stock price is undervalued."

Shinsegae's Q2 performance this year recorded consolidated sales of 1.5759 trillion KRW, down 16% year-on-year, and operating profit of 149.6 billion KRW, down 20%. The operating profit met market expectations (consensus). Researcher Joo analyzed, "Total department store sales increased by 0.2% compared to the previous year, and the base effect related to the reopening of economic activities is expected to continue until August, with a recovery trend starting from September. The duty-free store achieved a record-high operating profit margin of 8.3% in Q2 as the proportion of general customers with high margins significantly increased due to the recovery in travel demand."

Further improvement in duty-free store performance is expected in the second half of the year. Researcher Joo said, "It is necessary to focus on the improvement in the duty-free store segment's performance, which has not been properly recognized in corporate value until now," and added, "As the trend of increasing travelers continues, the possibility of further improvement in duty-free store performance in the second half is also high."