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[Alpha Biz=(Chicago) Reporter Paul Lee] Korea Investment & Securities said on the 25th that it is regrettable that the recovery of Chinese group tours to Korea is slower than market expectations for Shinsegae. The investment opinion was 'buy' and the target price was 'down' by 16.7% to 250,000 won. The closing price of the previous trading day was 157,700 won.
Korea Investment & Securities expects Shinsegae's operating profit to rise 29.7 percent on-year to 183.4 billion won in consolidated operating profit in the fourth quarter of last year and 21.7 percent to 1.7342 trillion won in sales over the same period. Both sales and operating profit are in line with market expectations.
Duty-free shops are sluggish due to a slower-than-expected recovery in business conditions, but the department store is expected to offset this by posting better-than-expected earnings. Due to the cold weather in the fourth quarter, the growth of existing department stores is expected to be better than expected, with operating profit of 91.4 billion won year-on-year.
"Considering flights between Korea and China, which increased from the second half of last year, we expect the recovery of Chinese group tours to begin in earnest around the second quarter of this year when demand for Chinese outing increases," said Korea Investment & Securities Co.
AlphaBIZ 폴 리(hoondork1977@alphabiz.co.kr)
