"Thank You, Foreign Customers": Lotte Shopping Moves From Recovery to Growth [Click e-Stock]

Samsung Securities Raises Lotte Shopping Target Price
from 160,000 Won to 185,000 Won

On May 12, Samsung Securities maintained its "Buy" investment rating on Lotte Shopping and raised its target price from 160,000 won to 185,000 won.

Jaeseung Baek, a researcher at Samsung Securities, stated, "The strong performance of the department store business, driven by rapid growth in foreign customer sales, is expected to continue for the time being."

Baek analyzed that Lotte Shopping's results in the first quarter of this year grew, centered on its department store business. In fact, Lotte Shopping's consolidated sales and operating profit increased by 3.6% and 70.6%, respectively, compared to the same period last year. In particular, the same-store sales growth rate for department stores was 13%, with 3 percentage points of that attributed to the increase in foreign customer sales.

He projected that department store sales would remain strong throughout this year, contributing to operating profit. Baek said, "Inbound demand for Korea, driven by factors such as China's ban on group tours to Japan, is expected to remain robust this year, and as a result, department store sales will continue their upward trend." He also noted, "Based on the improved performance of the department store business, which accounts for 79% of Lotte Shopping's consolidated operating profit, and the overall profit improvement of its consolidated subsidiaries, we have raised our net profit estimate for this year by 19%."

Regarding the hypermarket business, he predicted that competition would further ease as rival Homeplus announced the temporary closure of some stores. He added, "A key point to watch in the second half of this year is how quickly the Ocado logistics center, which will be fully operational from the third quarter and increase depreciation costs for the hypermarket business, can start contributing to future performance."