Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Event-Driven

<ul>
<li>On 11 June, it was reported that the Shinsegae Group plans to acquire entire remaining stake in SSG.com held by financial investors (Olympus No 1 Co.) for 1.3 trillion won.</li>
<li>I am turning Negative on Shinsegae. There are three major reasons. First, I think valuations are unattractive. Second, I think the company is overpaying for the remaining stake in SSG.com. </li>
<li>Third, although the company has been one of the beneficiaries of the stock market wealth effect in the past year, the sustainability of continued booming stock market remains suspect.  </li>
</ul>


On 11 June, it was reported that the Shinsegae Group plans to acquire entire remaining stake in SSG.com held by financial investors (Olympus No 1 Co.) for 1.3 trillion won.
I am turning Negative on Shinsegae. There are three major reasons. First, I think valuations are unattractive. Second, I think the company is overpaying for the remaining stake in SSG.com. 
Third, although the company has been one of the beneficiaries of the stock market wealth effect in the past year, the sustainability of continued booming stock market remains suspect.  


Shinsegae Group to Acquire Entire Remaining Stake in SSG.com for 1.3 Trillion Won

External broker reports(aggregated public sources), Mirae Asset Securities

Mirae Asset Securities

External broker reports(aggregated public sources)

Mirae Asset Securities Co.,Ltd. provides comprehensive wealth management services. The Company offers fixed income securities brokerage, securities dealing, equity underwriting, and other services. Mirae Asset Securities also deals with mergers and acquisitions, foreign currency, and financial derivatives

Equity Bottom-Up

<ul><li>We expect Shinsegae to report above-consensus 1Q26 results, with net revenue of W1.8tr (+8% YoY) and operating profit of W167.3bn (+26% YoY).</li><li>Strength in the department store segment was likely the key driver, while previously underperforming businesses, including the duty-free unit and Shinsegae International, likely showed meaningful improvement.</li><li>For department stores, we estimate gross revenue at W1.99tr (+11% YoY) and operating profit at W131.5bn (+22% YoY; OP margin of 6.6%). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We expect Shinsegae to report above-consensus 1Q26 results, with net revenue of W1.8tr (+8% YoY) and operating profit of W167.3bn (+26% YoY).Strength in the department store segment was likely the key driver, while previously underperforming businesses, including the duty-free unit and Shinsegae International, likely showed meaningful improvement.For department stores, we estimate gross revenue at W1.99tr (+11% YoY) and operating profit at W131.5bn (+22% YoY; OP margin of 6.6%). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Shinsegae (004170 KS/Buy)A Compelling Entry Point

<ul><li>Shinsegae posted above-consensus 4Q25 results, with net revenue of W1.93tr (+6% YoY) and operating profit of W172.5bn (+66% YoY).</li><li>Strong revenue growth at department stores was the main driver of profit growth, while the duty-free business delivered an unexpected return to profitability.</li><li>Looking ahead, structural drivers of department store growth should remain intact, and the firm’s exit from the DF2 zone at Incheon International Airport (IIA) should enhance duty-free earnings visibility.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Shinsegae posted above-consensus 4Q25 results, with net revenue of W1.93tr (+6% YoY) and operating profit of W172.5bn (+66% YoY).Strong revenue growth at department stores was the main driver of profit growth, while the duty-free business delivered an unexpected return to profitability.Looking ahead, structural drivers of department store growth should remain intact, and the firm’s exit from the DF2 zone at Incheon International Airport (IIA) should enhance duty-free earnings visibility.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Shinsegae (004170 KS/Buy)Inbound Tourism to Serve as Key Share Price Catalyst

<ul><li>For 4Q25, we expect Shinsegae to report above-consensus results, with net revenue of W1.94tr (+6% YoY) and operating profit of W173.6bn (+68% YoY).</li><li>At department stores, we expect gross revenue growth to rebound sharply to 9% YoY.</li><li>Previously, management stated that even after accounting for higher depreciation expenses stemming from store renovations, gross revenue growth of roughly 5% would be sufficient to ensure profit growth.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

For 4Q25, we expect Shinsegae to report above-consensus results, with net revenue of W1.94tr (+6% YoY) and operating profit of W173.6bn (+68% YoY).At department stores, we expect gross revenue growth to rebound sharply to 9% YoY.Previously, management stated that even after accounting for higher depreciation expenses stemming from store renovations, gross revenue growth of roughly 5% would be sufficient to ensure profit growth.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Shinsegae (004170) Still the Most Attractive Retail Play Even After Recent Rally

Asia Real Estate News Tracker, Asia Real Estate Tracker

Asia Real Estate Tracker

Asia Real Estate News Tracker

Tracking developments across Asia's regional real estate markets

Thematic (Sector/Industry)

<ul><li>Link REIT has divested a 50% stake in Sydney's 100 Market Street for $158 million to Aware Super.</li><li>Kingsford's acquisition of a redevelopment site in Singapore for $736 million is the year's largest sale.</li><li>A Frasers-led consortium has purchased a mixed-use site in Singapore's Bayshore area for $1.65 billion.</li></ul>

Link REIT has divested a 50% stake in Sydney's 100 Market Street for $158 million to Aware Super.Kingsford's acquisition of a redevelopment site in Singapore for $736 million is the year's largest sale.A Frasers-led consortium has purchased a mixed-use site in Singapore's Bayshore area for $1.65 billion.

Asia Real Estate Tracker (22-Jul-2026): Link REIT sells 50% of 100 Market St, Sydney, for $158M.

South Korea

Shinsegae Co., Ltd. operates department stores in South Korea.  The Company retails food, clothing, household goods, electronics, and other items through several branch stores.

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Shinsegae (004170 KS)

Shinsegae Group to Acquire Entire Remaining Stake in SSG.com for 1.3 Trillion Won

I am turning Negative on Shinsegae. There are three major reasons. First, I think valuations are unattractive. Second, I think the company is...

Douglas Kim