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[Alpha Biz=(Chicago) Reporter Paul Lee] Korea Investment & Securities maintained its investment opinion on Hotel Shilla 'buy' and target price of 90,000 won.
Korea Investment & Securities judged that "Considering Hotel Shilla's upside risks, it is easily accessible at the current stock price level." The investment opinion was 'buy' and the target price was 'maintain' 90,000 won.
"Although last year's fourth-quarter performance was far below market expectations, the earning shock was expected to some extent considering that the fourth quarter is the traditional inventory clearance period for duty-free operators," Korea Investment & Securities said in a report on the 29th.
Korea Investment & Securities Co. then predicted that group tours to Korea will also increase significantly in the second quarter when demand for Chinese outings increases.
Hotel Shilla's consolidated sales in the fourth quarter of last year fell 27.9 percent on-year to 937.6 billion won and 18.3 billion won in operating losses, far below the estimate. Due to the increase in unexpected costs (rent) of overseas duty-free businesses, the TR division's deficit widened to KRW 29.7 billion from the third quarter, and the domestic tax exemption is estimated to have recorded an operating loss (KRW 10 to KRW 12 billion) as it did in the third quarter of 2023, but this is expected. The hotel sector's operating profit fell 11.6% year-on-year to KRW 11.4 billion, failing to meet market expectations, but this is a good performance that meets the company's estimate when excluding bonus costs due to a one-time bonus (about KRW 5 billion to KRW 6 billion).
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
