[Edaily Reporter Shin Ha-yeon] On the 11th, NH Investment & Securities projected that #Shinsegae International would benefit simultaneously from the recovery of domestic consumption and the expansion of inbound foreign demand. Noting that the stock price is undervalued relative to industry conditions and earnings momentum, the firm maintained its “Buy” rating and target price of 21,000 won.

Jeong Ji-yoon, an analyst at NH Investment & Securities, stated, “In terms of the rebound in domestic consumption and increased foreign purchasing power, the company’s investment appeal aligns with that of department stores,” adding, “We recommend taking advantage of the current situation, where the stock price has diverged from its strong industry conditions and earnings momentum, as a buying opportunity.”

In particular, the firm forecast that growth in the imported fashion segment would be notable. Analyst Jeong explained, “Given the well-established portfolio of high-end overseas brands, the growth rate of imported fashion sales in May approached 50%,” adding, “The proportion of sales to foreign customers has also risen to the mid-to-high single-digit percentage range.”

NH Investment & Securities projected Shinsegae International’s second-quarter consolidated revenue and operating profit at 298 billion won and 12 billion won, respectively. The operating profit figure exceeds the market consensus by 13%. The analysis suggests that, excluding the lifestyle (JAJU) division from last year, revenue is expected to grow by 18% year-over-year, with a significant improvement in profits anticipated.

The fashion division is expected to lead the performance improvement, driven primarily by imported brands. Jeong Yeong-won explained, “We estimate that fashion division revenue will reach 128.1 billion won, a 36% increase year-over-year, and operating profit will turn to a profit of 4.4 billion won,” adding, “Profitability is improving as major imported brands such as UGG, Brunello Cucinelli, and Courrèges are showing balanced growth.”

The cosmetics division is also expected to continue its growth momentum, driven by strong performance from perfume brands and the recovery of Vidivici. Second-quarter sales for the cosmetics division are projected to reach 110 billion won, a 19% increase year-over-year, while operating profit is forecast to rise 299% to 8 billion won.

Additionally, Amuse, acquired in 2024, is expanding into overseas markets. Analyst Jung commented, “It is positive that the company is diversifying exports to Western markets such as France and Canada and expanding its distribution network, including signing an exclusive contract with Thailand’s Central Group.”

NH Investment & Securities projected that Shinsegae International will return to profitability this year, with revenue and operating profit reaching 1.259 trillion won and 52 billion won, respectively. The firm forecast that the trend of improved performance will continue next year, with operating profit rising to 64 billion won.