1. What was discussed at the Shinsegae IR?

The IR presentation focused on the company’s financial performance, key business updates, and a Q&A session with investors. Key areas of interest included the reasons behind the recent performance downturn, future growth strategies, and the company’s approach to navigating the uncertain macroeconomic environment.

2. Why the decline in performance?

Despite revenue growth, Shinsegae faces declining operating profits due to a combination of factors: economic slowdown, high interest rates and inflation, intensified online competition, and polarized consumption patterns. While the department store business remains robust, the duty-free and hotel divisions are struggling.

  • Department Store: Maintaining solid growth as the core revenue driver.
  • Duty-Free: Slipped into a loss due to slowing reopening effects and increased competition.
  • Hotel: Experiencing both revenue decline and losses.
  • Retail/Real Estate & Terminal: Maintaining profitability and stable earnings.

Macroeconomic uncertainties, including high interest rates and inflation, fluctuating exchange rates, and rising logistics costs, further pressure Shinsegae’s profitability.

3. How will Shinsegae overcome these challenges?

Shinsegae outlined plans for digital transformation, new business investments, and enhanced shareholder return policies during the IR, aiming to improve investor sentiment. However, if the presentation fails to meet market expectations or exacerbates concerns about macroeconomic uncertainties, investor sentiment could worsen.

4. What should investors do?

In the short term, closely monitor the IR details and market reactions. For the long term, key factors for investment decisions will include the sustained competitiveness of the department store business, the success of digital transformation and new business ventures, and overall macroeconomic improvement. Carefully evaluate the potential turnaround of the duty-free and hotel businesses, online competitiveness strategies, specific new business plans, and shareholder return policies before making investment decisions.