[Click e-Stock] Lotte Corporation, Normalization of Underperforming Businesses Through Group Rebuilding

On December 9, IBK Investment & Securities projected that Lotte Corporation will continue to experience domestic demand-driven growth in the short term, while normalization of its underperforming business divisions is expected in the mid- to long-term. The firm maintained its "Buy" investment rating and a target price of 40,000 won.

Lotte Group has recently undertaken a large-scale restructuring. In December last year, the group reduced losses at key subsidiaries by selling Lotte Rental for approximately 2.8 trillion won. In its recently announced 2026 executive reshuffle, the group replaced around 20 chief executive officers (CEOs) across its food, retail, and construction divisions.

Nam Sung-hyun, a researcher at IBK Investment & Securities, stated, "Lotte Group has strengthened its decision-making system and begun transitioning to a faster-paced structure by abolishing the business headquarters (HQ) system," adding, "This move, along with structural reorganization of business units and personnel restructuring, demonstrates efforts to ensure sustainable management."

The short-term growth led by the retail and food sectors is expected to spread throughout the entire group. Nam commented, "Growth in the food business divisions, such as Chilsung and Confectionery, is anticipated due to favorable department store conditions and overseas expansion. Normalization is also expected in previously underperforming business units, including Chemicals (Daesan NCC restructuring), Bio (expansion of orders for the Songdo Campus production line), 7-Eleven (restructuring), and GRS (brand renewal and overseas market expansion)."

He also dismissed recent market concerns surrounding Lotte Construction. Nam explained, "As of the third quarter, Lotte Construction secured approximately 541.5 billion won in cash and cash equivalents, and last month, it raised an additional 700 billion won through the issuance of hybrid securities. While the construction industry is indeed sluggish, the group's strong capacity to provide financial support means that these concerns should not be overstated."

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