[Click eStock] "Shinsegae Stock on the Rise... Still Undervalued"

Heungkuk Securities has significantly raised its target price for Shinsegae from 5.7 million won to 9.3 million won.

On June 23, Park Jongryeol, a researcher at Heungkuk Securities, stated, "Despite the recent sharp rise in the stock price, the 12-month forward price-to-earnings ratio (PER) and price-to-book ratio (PBR) remain attractive at 16.5x and 1.4x, respectively."

Shinsegae's stock price has been rising steeply. The target price suggested by Heungkuk Securities was 3.6 million won on January 26, 4.6 million won on February 11, 5.7 million won on May 13, and 9.3 million won the previous day. During the same periods, Shinsegae's closing stock prices were 2,775,000 won, 3,650,000 won, 4,825,000 won, and 7,190,000 won, respectively.

The company's second quarter performance this year is expected to far exceed forecasts. Consolidated sales for the second quarter are projected to reach 3.1 trillion won, up 8.4% from the same period last year, and operating profit is expected to jump 97.6% to 148.8 billion won. Park commented, "The company is expected to deliver strong results thanks to an increase in foreign tourists visiting Korea and a recovery in consumer sentiment, both of which have created favorable business conditions. Department store operating profit will drive earnings, and improvements are also expected in the duty-free business, Shinsegae International's return to profitability, and subsidiaries such as Central City and Live Shopping."

A positive outlook for consumption is also a factor improving the business environment. Since April of last year, the stock market has shown a sharp upward trend, and the asset effect from rising real estate prices, especially in central Seoul, could further support consumption recovery. Park analyzed, "Department stores are likely to maintain strong operating performance driven by the strong results at luxury landmarks such as the Gangnam and Main branches, as well as an increasing proportion of sales from foreign customers."

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