[Click e-Stock] "Earnings Upswing Set to Accelerate... GS P&L Target Price Raised"

IBK Investment & Securities announced on the 5th that it is maintaining its Buy rating on GS P&L and raising its target price to 76,000 won.

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Nam Seonghyeon, an analyst at IBK Investment & Securities, projected, "Last year, overall growth was driven by earnings growth at Grand InterContinental, but this year earnings can improve across all divisions, so there is a high possibility that total earnings will grow further."

He said, "Starting this month, there is a high likelihood that inbound demand to Korea will expand, centered on Chinese tourists, and profitability indicators at The Westin Josun Parnas can recover after the renewal. In the case of Nine Tree Hotel, considering the upward trend in average daily rate (ADR), growth of about 5-7% should not be difficult, and earnings from Jeju are also expected to increase thanks to a rise in the number of domestic visitors to Jeju."

In particular, he noted, "Last year, The Westin Josun Seoul Parnas posted an operating loss of 30 billion won due to a suspension of operations for renewal, but a recovery is expected to continue this year," adding, "Although the hotel showed a very low occupancy rate (OCC) of 71.9% in the fourth quarter of last year, it is positive when we consider that operating profit improved significantly."

Nam said, "In the fourth quarter of last year, revenue came in at 153.1 billion won and operating profit at 31.3 billion won, beating the market consensus in terms of operating profit," explaining, "This was because business performance in Jeju improved on the back of higher ADR at Grand InterContinental and the normalization of operations at The Westin."

He added, "For The Westin, losses widened when operations resumed in the third quarter of last year, but the hotel is maintaining a high ADR thanks to the renewal effect, so we expect to see benefits as occupancy recovers going forward."

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