Is There a Stock Benefiting from Semiconductor Bonuses? "High-End Spending Expected to Expand"

[Financial News] Shinsegae could benefit from large performance bonuses paid to employees of major semiconductor companies, according to a securities firm analysis. The view is that increased high-end spending by domestic consumers could improve department-store performance. The recent rise in foreign tourists is also a positive factor.
Jang Ho, a researcher at iM Securities, said on the 8th, "We are newly initiating coverage of Shinsegae with a 'Buy' rating and a target price of 68,000 won." He added, "Shinsegae's revenue is expected to reach 7.2342 trillion won this year, while operating profit is projected at 822.1 billion won, representing year-on-year increases of 4.4% and 71.3%, respectively."
Jang identified Shinsegae's "store scale" and "location competitiveness" as its key strengths. Although the company operates relatively few stores, it has strong merchandising capabilities, with the largest number of stores carrying the "Eru-Sha" group (Hermès, Louis Vuitton, and Chanel). It also operates large stores in the core commercial districts of major cities. As high-end spending is expected to grow, Shinsegae is likely to benefit.
Jang forecast, "The visibility of large performance-based compensation payments to employees of major semiconductor companies has recently been increasing." He added, "Given our view that the income effect could become another catalyst for expanding high-end spending by domestic consumers, we are watching the possibility that the benefits will be concentrated at Shinsegae South City."
The increase in foreign tourists is also expected to improve sales. Jang noted, "Tourism spending in the second quarter averaged 2.1 trillion won per month, up 59.6% from a year earlier, reflecting improvements in both per-capita spending and the number of visitors to Korea." He added, "Over the medium to long term, the increase in the number of visitors to Korea is expected to drive structural inbound growth."

[email protected] Jang Ho Reporter