Hanwha Investment Securities raised its price target for Shinsegae (KRX: 004170) from 770,000 won to 870,000 won on 30 June, while reaffirming its "Buy" recommendation on the South Korean department store and retail conglomerate.
Analyst Lee Jin-hyeop at Hanwha estimates Shinsegae's second-quarter 2026 operating profit at 156 billion won — a 107% increase year on year and comfortably ahead of the market consensus of 147.1 billion won.
Breaking down results by division, the department store business is expected to contribute operating profit of 106.1 billion won, up 49% year on year. The analyst cited robust domestic spending, strong inbound tourism, a higher share of luxury goods in the sales mix, and the effect of a renovation at Shinsegae's flagship Seoul store as the key drivers. Same-store sales growth is forecast at 25% year on year — roughly 10 percentage points higher than the industry average.
The flagship store's renovation, which repositioned the space around luxury brands, is expected to deliver year-on-year revenue growth of 70% in the second quarter. The analyst believes this outperformance will persist through the fourth quarter, when the comparison base from the renovation begins to equalise.
The duty-free business is forecast to post operating profit of 30.5 billion won — an improvement of 32 billion won compared with the same period last year — driven by a recovery in profitability at city-centre outlets and a reduction in losses following Shinsegae's withdrawal from the Incheon Airport DF2 concession.
The higher price target reflects an upward revision to the target price-to-earnings multiple applied to the department store division, from 15 times to 20 times. This was partially offset by a reduction in the target multiple for the duty-free business, from 18 times to 15 times. Based on the closing price of 729,000 won on 29 June, the revised target implies upside of 19.3%.
For the full year 2026, Hanwha forecasts Shinsegae's operating profit at 815.2 billion won, representing growth of 69.9% against the 479.9 billion won recorded in the prior year.