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[Alpha Biz=(Chicago) Reporter Paul Lee] KB Securities maintained its investment opinion on Lotte Shopping and raised its target price by 10% from 100,000 won to 110,000 won.
Analysts say that double-digit operating profit growth is expected to continue this year as Lotte Shopping's performance visibility is recovering from its low point in 2021.
"This year's total sales are expected to be 20.985 trillion won (+3%) and operating profit of 589.6 billion won (+16%)," KB Securities said on the 14th. "Lotte Shopping plans to improve the profitability of Grocerery (discount store/Super), overseas business, and subsidiaries (Home Shopping/Culture Works) and contribute to the growth of the company's profits."
"This year, sales of department stores are expected to grow only 3%, but operating profit will increase by 4% due to a reduction in labor and depreciation costs and a slowdown in capital mining costs," KB Securities said. "The combined operating profit of discount stores and supermarkets is expected to increase by 19%." "Home shopping will see its operating profit increase by 16.7 billion won over the past six months based on its low base caused by the early morning broadcast suspension," it added.
"In the fourth quarter of last year, consolidated sales were 5.2605 trillion won (-3%), net sales were 3.6329 trillion won (-4%), and operating profit was 202.4 billion won (+117%)," KB Securities said. "Sales were below market expectations by 3% and operating profit exceeded 16%. Department stores and Hi-Mart's operating profit improved significantly year-on-year, driving overall profit growth."
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
