[Infostock Daily= Reporter An Hoe Hyun] NH Investment & Securities maintained its investment opinion 'Buy' and its target stock price at 105,000 won for Hotel Shilla on the 19th, saying that competition with Chinese duty-free shops is expected to be intensifying amid a deficit in the aftermath of COVID-19.
"China's duty-free demand will grow more than 30% year-on-year this year thanks to the rising popularity of imported cosmetics in China and high growth of online channels such as live commerce," the company analyzed, adding, "However, there is a possibility that China's consumption benefits will be dispersed as the Hainan duty-free market is expected to grow rapidly and threaten the Korean duty-free market."
"Sales have not recovered as expected due to the rapid growth of the Chinese duty-free market following the opening of the additional Hainan duty-free shop and the re-proliferation of COVID-19," the company explained, adding, "Although rents have been changed at Incheon International Airport into sales linkage, existing fixed selling and administrative expenses are a burden."
"Hotel Shilla's consolidated sales in the fourth quarter of last year fell 45% year-on-year to 841.8 billion won and operating profit to negative(-)7.6 billion won and went into the red," the company explained, adding, "Both external growth and profitability are estimated to be below market expectations."
Reporter An Hoe Hyun ahh@infostock.co.kr
