IBK Securities on the 8th said Shinsegae needs to reflect the value of mid- to long-term asset complex development. It maintained a Buy rating and raised the target price to 780,000 won. Shinsegae's previous closing price was 650,000 won.
Nam Seong-hyeon, an analyst at IBK Securities, said, "Over the mid to long term, it is necessary to focus on the potential for fundamentals to strengthen as Shinsegae expands asset development."
Shinsegae is currently pursuing development of Gwangju Shinsegae, and the company is expected to expand its mixed-format operating income structure through future development of the Central Express Bus Terminal.
In particular, IBK Securities focused on the development of the Seoul Banpo Express Bus Terminal site. The Seoul Banpo Express Bus Terminal site spans about 100,000 pyeong, and the existing department store as well as a hotel, terminal, and shopping mall are reportedly set for a fresh makeover. According to information known so far, the plan calls for newly outfitting supertall residential facilities and existing shopping, cultural facilities, and a hotel, while moving the aging bus terminal underground.
Nam said, "It aims to build a compact city that aggregates cultural, arts, office, commercial, residential, and green functions, and because it is highly likely to be developed in a form similar to Japan's Azabudai Hills, it is expected to drive a rise in corporate value."
In particular, with Gwangju Shinsegae set to open in 2028, analysts said the value of that business unit is likely to come to the fore. Nam said, "Given that the pipeline is also lined up, assigning value is justified."
Earnings momentum is also expected to strengthen further in the second quarter.
Nam said this is "because the main store renewal effect is showing strongly, profitability is improving as the burden from increased depreciation eases, and a favorable business environment continues with inbound growth and rising asset values, while duty-free profitability is improving and key subsidiaries' results are recovering."