[Click eStock] "Lotte Jeongbotongsin, Strong Earnings Likely to Continue Long-Term"

On the 13th, KB Securities stated that Lotte Information & Communication is showing performance growth due to large-scale projects, and it is judged that the current favorable performance is likely to continue in the long term.

Lotte Information & Communication is a system integration (SI) specialist company that provides IT services to group companies and clients. It builds and operates necessary IT services for customers, and recently has entered new businesses such as the metaverse and electric vehicle charging, securing growth drivers.

Lotte Information & Communication's sales in the first quarter of this year recorded 270.7 billion KRW, an increase of 113% compared to the same period last year, and operating profit was 11.9 billion KRW, up 134%. This exceeded market expectations and is interpreted as a result of resumed investments in IT system improvements by affiliates due to the recovery of front industries after COVID-19.

Han Jeyoon, a researcher at KB Securities, explained, "Due to large SI projects related to group companies, the SI division's performance is expected to continue its steady growth," adding, "The integration of Lotte Confectionery and Lotte Foods is reflecting demand for IT system construction in performance, and an overall increase in SI-related demand is expected, including automation demand for factories and logistics centers owned by group companies, and IT system update demand following the acquisition of Lotte Energy Materials."

He continued, "The occupancy rate of the 4th data center, opened in 2021, is also expected to steadily rise, so performance growth is anticipated to continue this year," and added, "The electric vehicle charging business is also expected to secure long-term and rapid growth through synergy with the group’s distribution network."

Furthermore, it is analyzed that the expansion of electric vehicle adoption and the resulting increase in consumer charging needs will promote demand growth in related businesses. However, since the SI business is fundamentally order-based, there is a risk of delayed investments by clients due to external factors such as economic downturns.

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