[Click eStock] Hotel Shilla, Lack of Momentum for Stock Price Increase... Target Price Downgraded

[Asia Economy Reporter Hwang Yoon-joo] On the 3rd, KB Securities maintained a 'Buy' rating on Hotel Shilla but lowered the target price by 14%, citing a lack of short-term stock price momentum.

Researcher Park Shin-ae of KB Securities stated, "We have revised down our operating profit estimates for 2022 and 2023 by 19% and 6%, respectively."

Researcher Park explained, "It is necessary to wait while preparing for the right time to buy. The outbreak of Omicron has weakened expectations for the resumption of global travel, and the recovery of earnings is also being delayed."

Researcher Park said, "sales at duty-free shops, which are absolutely dependent on Chinese peddlers, are expected to temporarily weaken in January and February this year," adding, "This is due to the Chinese government's strengthened quarantine measures ahead of the Beijing Winter Olympics, which have led to reduced consumption and more stringent customs procedures."

However, she predicted, "At some point, global quarantine and travel restrictions will ease, and the expectation that lost sales (tourist purchasing demand, hotel occupancy rates, etc.) after the COVID-19 outbreak will normalize will grow stronger over time."

She continued, "The somewhat lacking short-term earnings momentum is a temporary issue," and pointed out, "The important question is how and how quickly the significantly lowered prices after the COVID-19 outbreak (=price discounts to stimulate consumption by peddlers) can be normalized."

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