Retail/Transportation
The author is an analyst of NH Investment & Securities. He can be reached at ys.jung@nhqv.com -- Ed.
From mid-March, large airlines have begun to expand flight operations to China. The Korean and Chinese governments are working to normalize international routes and ease respective entry restrictions. In addition, the Korean government has presented a goal of increasing foreign tourism to Korea to stimulate domestic demand. A rapid recovery in tourism is expected when the Chinese government enacts additional policy easing.
In the retail sector, we recommend the DFS segment. We present Hotel Shilla and Shinsegae as promising stocks for investment. In 1Q23, DFS industry shares moved sluggishly, affected by a combination of sales decline amid commission rate negotiations with Daigous and bidding for Incheon International Airport (IIA) duty-free store business licenses. However, as these issues are being resolved in a favorable direction, share price momentum should pick up going into 2H23.