[Click eStock] "Shinsegae Stock Price Rise Due to 'Value-Up' Impact... Target Price Down"

According to Incheon International Airport Corporation, among the DF 1 to 5 duty-free business rights available for large companies, Shilla and Shinsegae Duty Free were selected as multiple candidates for DF1-2, which sell perfumes, cosmetics, liquor, and tobacco, and DF3-4, which handle fashion, accessories, and boutiques. For DF5, which deals only with boutiques, Shilla, Shinsegae, and Hyundai Department Store Duty Free were selected as multiple candidates. The photo shows the duty-free shops located in the boarding terminal of Incheon International Airport on the 20th. Photo by Kang Jin-hyung aymsdream@

On the 20th, KB Securities analyzed that the recent stock price increase of Shinsegae is more influenced by expectations of shareholder returns than by fundamentals. Accordingly, they maintained a 'Buy' investment rating but lowered the target price by 7% to 250,000 KRW.

KB Securities researcher Ko Byung-guk stated, "The consolidated total sales for 2024 are expected to increase by 8% year-on-year to 12.0643 trillion KRW, and operating profit is expected to grow by 8% year-on-year to 689.6 billion KRW."

Researcher Ko analyzed, "Same-store sales in the department store division (including subsidiaries) are expected to grow by 4.5% in 2024, with operating profit increasing by 10%. The total sales in the duty-free division are expected to grow by 28%, but operating profit is projected to decrease by 24%."

Shinsegae's stock price has risen 17% over the past three weeks due to expectations surrounding the introduction of a 'Corporate Value-Up Program.' Researcher Ko pointed out, "Considering stable performance trends and valuation attractiveness, the stock price increase is reasonable, but recent stock price movements are driven more by expectations of shareholder returns than by fundamental factors."

He added, "We are lowering the operating profit estimates for 2024 and 2025 by 6% each," explaining the reason for the target price reduction.