May 09, 2024
Stocks & Bonds
[EQUITIES] ‘Lotte Shopping to gain from China exit’
[THE INVESTOR] Lotte Shopping’s earnings will improve as it sells off stores in China and completes its restructuring, said Daishin Investment and Securities on May 14, maintaining a “buy” recommendation and 280,000 won (US$262.69) target price.
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Its revenue in the first quarter slipped 2 percent on-year to 5.9 trillion won while operating profit climbed up 7 percent to 164.9 billion won, as department stores advanced on gradual recovery of consumer sentiments in Korea while its revenue from hypermarkets and supermarkets in China stumbled 97 percent, said analyst Yoo Jeong-hyeon.
Selling its Chinese operations will diminish its operating loss and bolster improvement in earnings, forecast the analyst. The retailer has signed contracts to sell 74 of its 110 outlets, and over 250 billion won in annual operating loss will diminish, said the analyst.
Lotte Shopping has been streamlining its structure over the past one year and with an expected 2.2 percent dividend rate, its stock price will continue to rise steadily, forecast Yoo.
By Hwang You-mee (glamazon@heraldcorp.com)
