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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Minyoung] On the 8th, Heungkuk Securities forecasted that although the recovery of Hotel Shilla's performance is being delayed more than expected, the performance recovery trend is expected to steepen in the second half of the year due to a low base. They maintained their "buy" investment rating and a target price of 80,000 won. The upside potential is 35.6%, and the closing price on the previous day was 59,000 won.
Heungkuk Securities stated, "For the second quarter of this year, Hotel Shilla's consolidated sales are expected to reach 1 trillion won, up 18.3% year-on-year, and operating profit is expected to decrease by 36.3% to 428 billion won compared to the same period last year."
Despite improvements in the hotel and leisure sector, they anticipate continued poor performance due to the high base effect of duty-free shops. In the first quarter, operating profit saw a significant decline compared to the previous year, despite high external growth. The diagnosis is that the deterioration in the profitability of duty-free shops and the worsening profitability of the hotel and leisure sectors have had a significant impact. Until the first half of this year, a downward trend is inevitable due to the high base effect from last year, but in the second half, a recovery in performance momentum is expected due to the extremely low base effect from last year.
They anticipated a possible recovery in performance this year with an increase in inbound foreign tourists. Particularly, they forecasted that the expansion of inbound Chinese group tourists would be a major driver of performance improvement.
They estimated that annual sales for this year would reach 4.3 trillion won, up 21% from the previous year, and operating profit would increase by 56.9% to 143 billion won. They evaluated that while duty-free shops will drive performance improvement, the hotel and leisure sector will also record solid performance.
They noted that to establish a basis for stock price growth amid continued poor performance, an expansion of shareholder returns policy would be required.
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
