Hana Securities announced on November 11 that it has lowered its target price for Shinsegae from 430,000 won to 365,000 won, citing concerns that the slowdown in the department store sector could weigh on the company's stock price. The department store division accounts for more than 60% of the company's operating profit, making its recovery crucial for any rebound in stock value. The firm maintained its 'buy' rating.
Park Jong-dae, a researcher at Hana Securities, stated in a report that "the stock momentum will be limited until the department store sector shows signs of recovery in growth rates."
Regarding the outlook for the fourth quarter, Park identified the slowdown in department store growth as a primary concern. He projected that same-store sales growth for October and November would be around 1% compared to the same period last year, noting that foreign sales have rapidly declined to 25%, and luxury goods sales are also experiencing a downturn. However, he added, "the increase in the proportion of high-margin fashion items is positive for profitability."
Although Shinsegae's third-quarter results slightly missed market expectations, they were still considered satisfactory. The company's consolidated revenue for the third quarter was reported at 1.6562 trillion won, with an operating profit of 164.3 billion won. Park noted that "the performance of major affiliates showed a clear recovery," highlighting a robust overall improvement in results.
* This article has been translated by AI.
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