Retail in Asia

In Markets

S. Korean retailers’ earnings to fall due to new anti-graft law

Shinsegae Korea Retail in Asia

Goldman Sachs Group, a United States-based investment banking giant, has revised down earnings forecast of South Korea’s major retailers for next year by more than 10 percent, citing possible adverse effects from the country’s adoption of the anti-corruption law banning public officials from accepting gifts that cost 50,000 won ($44.7) or more.

According to multiple sources from the financial investment industry on Monday, Goldman Sachs released a nine-page report on the potential impact of the new anti-graft law on four major retailers – Korea Tobacco & Ginseng Corp. (KT&G), Shinsegae Inc., Hyundai Department Store Co., and E-Mart Inc.

SEE ALSO: Shinsegae Group to operate COEX mall

The investment firm in its report revised down next year’s net profit forecast of the retailers by an average of 11 percent from its previous estimates.

By retailer, Goldman Sachs lowered its 2017 net income forecast for E-Mart by 16 percent from the previous estimate of 374.2 billion won to 314.3 billion won. It also forecast Shinsegae’s net profit to fall by 15 percent from the earlier estimate of 228.1 billion won to 193.9 billion won, while that of Hyundai Department Store by 8 percent from 368.1 billion won to 338.7 billion won.

The net profit outlook for KT&G for 2017 was also revised down by 5 percent from the investment firm’s July estimate of 1.26 trillion won to 1.20 trillion won.

(Source: Pulse News)