Korea Investment & Securities analyzed on the 9th that Shinsegae is expected to have favorable stock price trends this year. It is forecasted that Shinsegae, which has significant exposure to the duty-free industry due to the improvement in the duty-free industry outlook in the second half and adjustments in airport rental fees, will align its stock price with other corporations in the department store sector. The target price has been raised from the previous 195,000 won to 215,000 won, while maintaining the investment opinion as 'buy.'
Researcher Kim Myung-ju of Korea Investment & Securities noted, 'It is unlikely that the duty-free industry will perform worse in the second half compared to the first half.'
Lotte Duty Free has suspended large-scale 'daigong' transactions that have been unprofitable since the beginning of the year, which has improved the profitability of Shinsegae and Hotel Shilla's downtown duty-free shops. After a poor year last year, the Chinese cosmetics industry is expected to recover this year, and with the strong yuan exchange rate, a rebound in daigong demand is anticipated.
The implementation of a visa-free policy for group tourism from China is also expected in the third quarter. Considering that the share of duty-free retail sales from Chinese group tourists was around 3% in the first quarter, an expansion of this sales share is anticipated.
The postponement of the airport rental fee adjustments between Incheon Airport, Shinsegae, and Hotel Shilla, originally scheduled for the 2nd, was also evaluated as a positive factor for stock prices.
Researcher Kim stated, 'While the results of the rental fee adjustments are difficult to predict, the current stock price does not reflect expectations for rental reductions,' and added, 'If the adjustments succeed, it will be a positive factor.'