IBK Securities announced on June 8 that it has raised its target price for Shinsegae from 530,000 won to 780,000 won, an increase of 47%. The firm maintains a "buy" rating, citing expectations for expanded asset value through large-scale mixed-use developments beyond the company's traditional department store focus.
Nam Seong-hyun, a researcher at IBK Securities, emphasized the need to focus on the potential for strengthened fundamentals due to expanded asset development in the medium to long term. He noted that the momentum is shifting from luxury consumption to asset development.
IBK Securities predicts that the ongoing Gwangju Shinsegae development and the Seoul Banpo Express Bus Terminal site redevelopment will be key drivers of corporate value enhancement. The Banpo site, covering approximately 100,000 pyeong, is set to undergo a major mixed-use development that will revamp the existing department store, hotel, terminal, and shopping mall.
The firm also anticipates that performance momentum will strengthen further in the second quarter. The effects of the main store's renovation are expected to take hold, alleviating the burden of increased depreciation costs, which will improve profitability. Additionally, favorable operating conditions are expected to continue due to a rise in inbound tourists and increased asset values.
The closure of the Incheon Airport DF2 duty-free business is also expected to improve profitability in the duty-free sector, along with the recovery of major subsidiaries' performances. Nam stated, "With the opening of Gwangju Shinsegae in 2028, the value of this project is likely to become more prominent, and considering the various development pipelines, a reassessment of asset development value is necessary at this time."
* This article has been translated by AI.
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