Daishin Securities has maintained its BUY recommendation on Shinsegae (ticker: 004170) whilst raising its target price by 67%, from 600,000 won to 1,000,000 won, as of 15 June.

Department Store: Foreign Sales Accelerating

Daishin projects same-store sales growth at Shinsegae's department stores of 26% in the second quarter (on a management-reporting basis). Sales to foreign visitors are expected to accelerate from 90% growth in the first quarter to more than 110% in the second, with the flagship Myeong-dong store forecast to record an increase of more than 200%.

On a consolidated basis, the brokerage forecasts second-quarter total revenue of 3.2957 trillion won (up 14% year-on-year) and operating profit of 161.3 billion won (up 114% year-on-year). The current share price, as of 12 June, stands at 695,000 won.

Duty-Free and Fashion Units Set for Turnaround

The group's duty-free arm, Shinsegae DF, is expected to benefit from growth in individual foreign tourist (FIT) sales and an expansion of regular retail floor space at airport outlets. A reduction in discount rates at city-centre stores is forecast to push the division's operating profit into the black on a year-on-year basis. The fashion subsidiary Shinsegae International is likewise expected to return to profitability, supported by robust domestic fashion consumption.

Full-Year Estimates Revised Sharply Higher

Daishin has also upgraded its full-year earnings forecasts. Its 2026 operating profit estimate has been raised by 21.8%, from 659.0 billion won to 802.0 billion won, while the net profit attributable to controlling shareholders has been revised up by 43.3%, from 297.0 billion won to 425.0 billion won.

Analyst View: A Japanese Blueprint for Re-rating

Yu Jeong-hyeon, the analyst at Daishin Securities covering the stock, argues that "given the rising global popularity of K-culture and the prevailing trend of won weakness, the momentum in foreign visitor sales is likely to persist for the foreseeable future." She draws an explicit parallel with Japan's department store sector in 2023–24, which underwent a significant valuation re-rating as foreign tourist spending surged. "Just as the Japanese department store industry was re-rated on the back of rising foreign sales," she writes, "Korea's department store sector should undergo a similar reappraisal alongside its improving earnings trajectory."