[Featured Stock] Hotel Shilla Hits New Low Amid Securities Firms' Target Price Downgrades

Hotel Shilla hit a new 52-week low shortly after the market opened on the 4th as multiple securities firms lowered their target prices.

As of 9:31 a.m. that day, Hotel Shilla was trading at 40,800 KRW on the KOSPI, down 2,850 KRW (6.42%) from the previous close.

The stock price fell intraday to 40,500 KRW, setting a new 52-week low.

The main reason for the stock price decline was lowered expectations from the securities industry. On that day, Shin Young Securities, Hanwha Investment & Securities, DB Financial Investment, NH Investment & Securities, Korea Investment & Securities, Daishin Securities, Samsung Securities, Shinhan Investment Corp., and Hana Securities all simultaneously lowered their target prices.

Researcher Jo Sang-hoon of Shinhan Investment Corp. said, "Reflecting the slow recovery in the business environment, we have lowered earnings estimates and cut the target price by 20%. Structural earnings improvement that surpasses the base effect is urgently needed."

Jo analyzed, "Hotel Shilla's third-quarter earnings significantly missed the consensus (average securities firm forecast). Poor performance continued due to a combination of China's consumption downturn, rising discount rates, and the burden of airport store rent."

He also expressed the need for a cautious approach for the time being. Jo said, "Concerns include the fundamental decline in the attractiveness of the duty-free channel, changes in cosmetics consumption trends, and prolonged downturn in Chinese consumption, which lowers earnings visibility. To upgrade the investment rating, a visible recovery of group tourists with high average spending or a larger-than-expected announcement of China's domestic economic stimulus measures will be necessary."