Shinsegae rose 5% in early trading on the 10th. The buying appears to be driven by fourth-quarter growth last year and expectations for strong results this year.
As of 9:32 a.m. on the 10th, Shinsegae was trading at 376,000 won, up 21,000 won (5.92%) from the previous session on the Korea Exchange.
Brokerages raised Shinsegae's target price on the day. ▲ Hanwha Investment & Securities 470,000 won ▲ Kyobo Securities 430,000 won ▲ Shinhan Investment & Securities, LS Securities, NH Investment & Securities, Samsung Securities 420,000 won ▲ IBK Securities 410,000 won.
Earlier, Shinsegae said revenue in the fourth quarter last year came to 1.9337 trillion won, with operating profit of 172.5 billion won. Those figures were up 6.2% and 66.5%, respectively, from a year earlier.
IBK Securities analyst Nam Seong-hyeon said, "Rapid growth in the luxury category drove the department store business results, while the duty-free segment turned to profit through a profitability-focused strategy," adding, "Shinsegae Central City hotel revenue growth and higher rent at the Gangnam branch also contributed to the strong fourth-quarter results last year."
Nam projected that with a favorable business environment continuing, the improvement trend in this year's results will persist. Nam said, "Store renovation effects, a recovery in inbound (foreign) tourists, and rising asset values are working positively," adding, "Profitability improvement from the closure of the Incheon Airport DF2 store will be reflected starting in the second quarter this year."