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[Alpha Biz=(Chicago) Reporter Paul Lee] KB Securities presented Shinsegae with a target price of 250,000 won, down 7% from the previous one, saying that the stock price has risen due to expectations of shareholder return rather than fundamentals. The investment opinion 'buy' was maintained.
"The total consolidated sales are expected to increase by 8% this year to 12.643 trillion won and operating profit of 689.6 billion won, respectively," KB Securities said. "Department stores, Shinsegae International and Casamia are expected to contribute to the increase in corporate profits, but profits in the duty-free shop sector are expected to decrease compared to the previous year."
"The sales of department stores (including subsidiaries) are expected to grow by 4.5% this year and operating profit is expected to increase by 10%," KB Securities said. "The total sales of the duty-free sector are expected to grow by 28%, but operating profit is expected to decrease by 24%. The first half will be reduced due to the high profit base burden of Incheon International Airport."
"Shinsegae's stock price has risen 17% over the past three weeks on expectations of the introduction of a corporate value-up program. "Considering the stable performance trend and valuation attractiveness, including the expectation of a record-high operating profit this year, the stock price rise is reasonable and still undervalued," KB Securities said.
AlphaBIZ 폴 리(hoondork1977@alphabiz.co.kr)
