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Shinsegae Group Chairman Chung Yong-jin. (Photo=Shinsegae Group) |
[Alpha Biz= Reporter Kim Sangjin] Daishin Securities has lowered its target price for Shinsegae from 220,000 won to 190,000 won, citing the company's transition to operating losses in its duty-free business despite strong performance in its department store sector.
Analyst Yoo Jung-hyun from Daishin Securities stated, "We maintain a 'Buy' rating but have reduced the target price to 190,000 won due to the underperformance of the duty-free business, which led to a downward revision of next year's earnings estimates."
For the third quarter, Shinsegae reported total revenue of 2.71 trillion won, a 4% increase from the previous year, and operating profit of 930 billion won, up 29% year-on-year. The department store division's revenue grew by 2%, but operating profit declined by 5% due to weaker high-margin fashion sales and increased depreciation costs. The opening of the first phase of the Incheon Airport duty-free shop in September increased rental costs by 6 billion won compared to the previous quarter.
However, since significant sales have not yet materialized, the higher operating costs and depreciation expenses led to a shift in operating profit from 86 billion won in Q2 to a loss of 162 billion won in Q3.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
