[Click eStock] "Hotel Shilla, Second Half Looks Promising"

Yuanta Securities Issues 'Buy' Investment Opinion and Sets Target Price at 105,000 Won... Closing Price on 9th at 81,000 Won

Due to the confirmation of a visit by a confirmed case of the novel coronavirus infection, the entrance of Shilla Duty Free Seoul Branch, which temporarily closed on the 2nd of last month / Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Geum Bo-ryeong] Despite the difficulties faced by the duty-free industry due to the novel coronavirus infection (COVID-19), there is an analysis that the second half of the year is promising for Hotel Shilla.

According to Yuanta Securities on the 10th, among the distribution industries, the duty-free shops have been the most adversely affected by the spread of COVID-19 in Korea and China. With the activities of _ttaigong_ (overseas resellers) shrinking, sales have decreased by 40% compared to the previous year.

Recovery is expected to be possible during the second quarter. Lee Jin-hyeop, a researcher at Yuanta Securities, said, "Although the situation is physically disconnected due to aircraft groundings and reduced flights, the fact that _ttaigong_ orders continue through online duty-free shops indicates that _ttaigong_ demand remains robust. If the COVID-19 situation in Korea and China is resolved before next month, duty-free sales are expected to return to normal tracks starting in May," he explained.

Expectations for a series of issues are expected to emerge in the second half of the year. First, there is a high possibility that expectations for Chinese consumption will be reflected due to the Chinese government's economic stimulus measures to be detailed at the National People's Congress. Additionally, Chinese President Xi Jinping's visit to Korea remains pending. The researcher analyzed, "With President Xi's visit to Japan officially postponed, the possibility of a visit to Korea in the first half of the year has significantly decreased, but since our government has a strong will to normalize Korea-China relations, a visit by President Xi within the year is still possible. If a concrete signal of President Xi's visit emerges, the valuation re-rating phenomenon that appeared since the end of last year could be reproduced once again."

Yuanta Securities has given Hotel Shilla a 'Buy' investment rating with a target price of 105,000 KRW. The closing price on the 9th was 81,000 KRW.

This content was produced with the assistance of AI translation services.