Shinsegae, Rapid normalization of department store sales…Target stock price increase(KB Securities)
Shinsegae, Rapid normalization of department store sales…Target stock price increase(KB Securities)
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  • 승인 2020.11.13 16:02
  • 최종수정 2020.11.13 15:51
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Shinsegae

[Infostock Daily= Reporter An Hoe Hyun] KB Securities explained on the 13th that Shinsegae(004170) is rapidly normalizing sales at department stores, and that it is expected that profits and losses at duty-free shops will improve from the lowest point of the 2nd quarter compared to the quarter. In response, the company maintained its 'buy' investment opinion, while raising its target stock price by 10% from 300,000 won to 330,000 won.

In 2021, Shinsegae's total sales are expected to grow 21% year-on-year and operating profit will increase 314%. Half of the increase in operating profit(51%) accounted for the increase at duty-free shops, while department stores, Central City and Shinsegae International, whose earnings worsened due to COVID-19, are also expected to contribute to the company's increase by 18%, 10% and 14%, respectively.

In the third quarter of this year, total sales fell 20% year-on-year to 1.9157 trillion won and operating profit fell 74% to 25.1 billion won. Sales were consistent with the consensus and operating profit was below 17%.

By sector, total sales of department stores fell 3% and operating profit fell 39% to 33.6 billion won. Duty-free shops posted 437.2 billion won in net sales, down 45% from a year earlier, and turned to a deficit compared to the same period a year earlier, recording an operating loss of 20.5 billion won.

Central City was sluggish, with sales and operating profit falling 18% and 41%, respectively. However, the hotel accommodation rate was 36% better than the previous quarter(13%).

Shinsegae International saw its sales fall 7% and operating profit drop 63%, respectively.

Reporter An Hoe Hyun ahh@infostock.co.kr


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