April 25, 2024

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[THE INVESTOR] Hotel Shilla’s domestic revenue will continue to rise while overseas operations will turn to black, said Shinhan Investment on Oct. 4, maintaining a “buy” recommendation and 150,000 won (US$132.99) target price.

Despite a weak yuan and rumors regarding regulating private shuttle traders, its third-quarter revenue from downtown duty-free stores in Korea will hike 24 percent from the same period last year satisfying market expectations. Its operating profit will surge 113.4 percent to 64.7 billion won. The upward momentum will be maintained as Chinese customers are expected to increase spending due to a series of festive occasions. Operating profit in the fourth quarter will soar 322 percent on-year to 65.5 billion won, said analyst Seong Jun-won.

As for its overseas business, Singapore’s Changi Airport in particular will turn to black in the fourth quarter, gaining from 1.7 billion won loss in the previous quarter. Operating loss of the branch will shrink to 7.9 billion won this year, from last year’s 26.5 billion won, and will turn around next year with 3.8 billion won profit, the analyst noted. 

Hotel Shilla’s annual operating profit will remain on an upturn, reaching 243.9 billion won this year and 296.3 billion won next year, and increase in Chinese inbound tourists could further lift the bottom line, he said. 

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