[Stock in Focus] Shinsegae Surges on Continued Earnings Improvement Outlook...Hits Record High

Shinsegae continued its upward trend for a second consecutive day, setting a new 52-week intraday high.

As of 9:25 a.m. on January 12, Shinsegae was trading at 2,745,000 won on the Korea Exchange, up 140,000 won (5.37%) from the previous day. During intraday trading, the stock rose to 2,750,000 won, marking a new 52-week high.

Solid earnings prospects appear to be driving the stock price higher. On this day, Kiwoom Securities projected that Shinsegae's operating profit for the fourth quarter of last year would reach 176.4 billion won, a 70% increase compared to the same period the previous year, surpassing the consensus (the average of analysts' forecasts). Park Sangjun, a researcher at Kiwoom Securities, explained, "The strong performance is being led by improved domestic consumer sentiment, the effects of large store renovations, and an increase in sales to foreign customers, which are driving significant improvements in the results of the department store, duty-free, Shinsegae International, and Central City businesses." He added, "In particular, despite the burden of increased depreciation expenses due to large store renovations, the department store division is expected to lead overall earnings improvement, as same-store sales in the fourth quarter grew significantly compared to the same period last year."

The trend of earnings improvement centered on the department store division is expected to continue. Park further stated, "In the first quarter of this year, Shinsegae's sales are expected to show solid growth, led by the department store business. In the short term, it will be important to monitor the impact of the upcoming re-bidding for the Incheon Airport duty-free store in January, but the earnings improvement trend centered on the department store division is likely to persist."