Corporate Logo(source: shillahotels.com )
Hana Securities raised its target price for Hotel Shilla (008770) from 45,000 won to 60,000 won on June 10, maintaining a “Buy” rating. The brokerage expects the company to reach peak turnaround momentum in the second and third quarters of this year.
Hotel Shilla posted an operating loss of 2.5 billion won in the first quarter, significantly outperforming market expectations. The duty-free business recorded an operating loss of 5 billion won, marking a substantial improvement from the previous quarter, which Hana attributes largely to margin gains at downtown duty-free stores.
Following Lotte Duty Free’s suspension of transactions with Chinese resellers (known as “daigong”), competitive pressures eased. As a result, downtown store operating margins—barely at break-even levels in Q4—rose to over 8% in Q1, according to the brokerage. While combined losses from domestic and international airport duty-free operations are estimated at around 30 billion won, the loss trend appears to be narrowing compared to the prior quarter.
Hana Securities forecasts second-quarter consolidated operating profit at 19 billion won, down 30% year-on-year. Still, both operational performance and business conditions are expected to improve from the first quarter. Sales at downtown duty-free stores are projected to increase approximately 10% quarter-on-quarter, while losses from overseas airports should shrink following the conclusion of rent reduction negotiations.
The brokerage noted that the second and third quarters will provide clear visibility into the company's earnings trajectory. While structural constraints in the duty-free sector may limit upside valuation, Hana emphasized that now is the time to focus on Hotel Shilla’s strong quarterly earnings momentum.
Seo Hyun-jung, an analyst at Hana Securities, stated, “We expect Hotel Shilla to return to profitability in Q2, and earnings are likely to improve significantly from Q3 due to a favorable base effect. Despite valuation concerns, the magnitude of the anticipated earnings recovery merits investor attention.”
*[KOSPI]Hotel Shilla(008770) is an affiliate of Samsung Group and its main businesses are duty-free and hotel business. The market capitalization is 1.978 trillion won (as of June 9, 2025, closing price).
Corporate Logo(source: shillahotels.com )
Hana Securities raised its target price for Hotel Shilla (008770) from 45,000 won to 60,000 won on June 10, maintaining a “Buy” rating. The brokerage expects the company to reach peak turnaround momentum in the second and third quarters of this year.
Hotel Shilla posted an operating loss of 2.5 billion won in the first quarter, significantly outperforming market expectations. The duty-free business recorded an operating loss of 5 billion won, marking a substantial improvement from the previous quarter, which Hana attributes largely to margin gains at downtown duty-free stores.
Following Lotte Duty Free’s suspension of transactions with Chinese resellers (known as “daigong”), competitive pressures eased. As a result, downtown store operating margins—barely at break-even levels in Q4—rose to over 8% in Q1, according to the brokerage. While combined losses from domestic and international airport duty-free operations are estimated at around 30 billion won, the loss trend appears to be narrowing compared to the prior quarter.
Hana Securities forecasts second-quarter consolidated operating profit at 19 billion won, down 30% year-on-year. Still, both operational performance and business conditions are expected to improve from the first quarter. Sales at downtown duty-free stores are projected to increase approximately 10% quarter-on-quarter, while losses from overseas airports should shrink following the conclusion of rent reduction negotiations.
The brokerage noted that the second and third quarters will provide clear visibility into the company's earnings trajectory. While structural constraints in the duty-free sector may limit upside valuation, Hana emphasized that now is the time to focus on Hotel Shilla’s strong quarterly earnings momentum.
Seo Hyun-jung, an analyst at Hana Securities, stated, “We expect Hotel Shilla to return to profitability in Q2, and earnings are likely to improve significantly from Q3 due to a favorable base effect. Despite valuation concerns, the magnitude of the anticipated earnings recovery merits investor attention.”
*[KOSPI]Hotel Shilla(008770) is an affiliate of Samsung Group and its main businesses are duty-free and hotel business. The market capitalization is 1.978 trillion won (as of June 9, 2025, closing price).