[Click e-Stock] "Seobu T&D Target Price Raised on Expectations for Hotel and Development Profits"

Hana Securities announced on the 23rd that it is maintaining its "buy" investment rating on Seobu T&D and raising its target price by 20% from the previous level to 21,000 won.

Lee Kihun, a researcher at Hana Securities, said, "The golden cross between Chinese visitors to Korea and Chinese visitors to Japan that we had expected to occur in the second quarter of this year is materializing much earlier and more strongly," and forecast, "As Seobu T&D, which operates a 1,700-room hotel in Yongsan, sees both its room occupancy rate (OCC) and average daily room rate (ADR) rise together, it will continue to post record-high results."

He added, "As the development of Yongsan and Sinjeong-dong becomes visible, construction and pre-sales are expected to take place between the fourth quarter of this year and the first quarter of next year. If all units are sold out, substantial development profits could be reflected from next year through 2031, so we continue to present the company as our top pick within the leisure industry."

In particular, Lee said, "Most of the land in the Yongsan Najin shopping district that has been designated as a special planning zone passed architectural review last year, and construction and pre-sales are expected to begin in the fourth quarter of this year. Out of a total of 22,000 pyeong, officetels and offices each account for 10,000 pyeong, and if we assume there are no issues related to the sale of high-end officetels, pre-sale revenue alone is expected to come in at around 500 billion won."

He explained, "The Sinjeong-dong project consists of 899 households, with construction and pre-sales expected to begin in the first quarter of 2027, and if there are no particular issues, pre-sale revenue alone will exceed 1 trillion won. In addition, once a logistics center with more than 20,000 pyeong of floor area and a mixed-use shopping mall are completed with a one-year time gap, the company will also be able to generate substantial rental income."

Lee said, "Seobu T&D's sales and operating profit in the fourth quarter of last year were 77.4 billion won and 22.9 billion won, respectively, both record highs," and added, "We estimate the hotel OCC at around 75% and the ADR at around 200,000 won, and we expect the company to benefit from BTS's comeback and concerts, as well as from the easing of travel restrictions between Korea and Japan."

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