[Market Focus] Shinsegae Food Drops Over 7% on News of Food Service Business Sale

Shinsegae Food shares declined in early trading on August 29 following news of the sale of its food service business division.

As of 9:42 a.m. on this day, Shinsegae Food shares were trading at 40,250 won on the Korea Exchange, down 7.47% from the previous trading day. The stock opened at 43,900 won and at one point during the session fell to 40,100 won.

After the market closed the previous day, Shinsegae Food announced that it had signed a contract to transfer its food service business unit to Gourmet Galleria, a subsidiary of Ourhome. The company will transfer 100% of its group catering business for industrial sites and offices, with the transfer price set at 12 billion won. An extraordinary general meeting of shareholders is scheduled for October 15 to approve the transfer of business agenda.

The decline in share price appears to be due to concerns over a weakening growth engine. The food service business accounted for approximately 18% of Shinsegae Food's total revenue and served as a stable source of income.

Recently, Shinsegae Food has been working to improve profitability by streamlining inefficient businesses. Last year, Shinsegae Food's operating profit was 20.8 billion won, down 21.4% from the previous year. The operating margin was only 1.4%. The company's sales growth rate has also been declining: 7.5% in 2021, 6.2% in 2022, 5.5% in 2023, and 3.1% in 2024.

This content was produced with the assistance of AI translation services.