April 19, 2024

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[THE INVESTOR] Hotel Shilla’s earnings will be strong through next year, said NH Investment and Securities on Dec. 27, while lowering the target price to 120,000 won (US$ 106.97) from 160,000 won to reflect deteriorating investor sentiments. 

Its revenue in the fourth quarter will hike 26 percent on-year to 1.12 trillion won and operating profit by 269 percent to 57.2 billion won. Sales remained robust but the duty-free sector’s seasonal factors brought down the figures slightly. Its operating profit ratio is improving significantly from a year ago as it gains leverage. There are many variables for the duty-free industry, but Hotel Shilla will not be swayed. Its revenue in 2019 will rise 16 percent from this year to 4.79 trillion won and operating profit by 26 percent to 277.8 billion won, said analyst Lee Ji-yeong.

Its target price has been lowered factoring in the policy uncertainties both in Korea and China, but earnings prospects remain bright as inbound tourism from China is likely to recover, said the analyst, adding that its valuation is attractive at 14 times its price-earnings ratio. 

By Hwang You-mee (glamazon@heraldcorp.com)