"Shinsegae, Excessively Undervalued Despite Solid Performance...Aggressive Buy Recommended"[Click eJongmok]

On September 10, Heungkuk Securities maintained its target price for Shinsegae at 660,000 won and its "Buy" rating, stating that the company's shares remain excessively undervalued compared to solid business performance.

Paek Jongmin, a researcher at Heungkuk Securities, explained in a report released on this day, "Following a sharp decline in the stock market since mid-June and concerns over a slowdown in the department store sector, Shinsegae's stock price also fell. However, department store operations have continued a solid trend since July, and the contribution to overall sales by an increasing number of inbound foreign tourists continues to rise steadily."

The consolidated performance in the third quarter is also expected to show a strong improvement. Heungkuk Securities forecasts that Shinsegae’s total sales for the third quarter will increase by 10.4% year-on-year to 3.108 trillion won, while operating profit is projected to surge 93.6% to 193.2 billion won. The researcher stated, "Profit growth in department stores will drive overall performance, and the profitability turnaround of the duty-free (Shinsegae DF) and Shinsegae International businesses—as well as performance improvement by subsidiaries such as Central City, Live Shopping, and Casa—will contribute to strong results."

The department store segment is expected to maintain a robust trajectory, backed by the success of luxury landmark stores such as the Gangnam and Main branches, as well as a growing proportion of sales to foreign customers. The duty-free business is also pursuing a profitability-focused strategy, including withdrawing from DF2 and strengthening the city-store's ability to attract foreign customers. As a result, the company is projected to achieve a consolidated annual operating profit of 829.2 billion won this year, up 72.8% from the previous year.

The researcher added, "After the cancellation of company treasury shares in 2025–2026, Shinsegae also plans to retire the remaining 7.2% of outstanding treasury shares in stages. Given the current price range, an aggressive buy strategy is warranted."

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