[Click e-Stock] Seobu T&D: Solid Profitability and Shareholder-Friendly Policies... Target Price Raised

On June 16, SK Securities analyzed that Seobu T&D is enhancing its solid profitability with the addition of shareholder-friendly policies. The firm maintained its 'Buy' investment rating and raised the target price to 10,600 won.

In the first quarter of this year, the number of foreign visitors to Korea reached 4.09 million, up 14.6% compared to the same period last year. During the same period, Seobu T&D's revenue increased by 11.5% to 46.1 billion won, and operating profit rose by 20.0% to 12.9 billion won.

Na Seungdoo, a researcher at SK Securities, explained, "Seobu T&D owns Seoul Dragon City, a multi-complex cultural facility that houses four hotel brands with a total of about 1,700 rooms and a casino exclusively for foreigners." He added, "Since the COVID-19 pandemic, the supply of five-star hotel rooms has been insufficient, and the geographical advantage of Yongsan, a major transportation hub, has further contributed to the simultaneous increase in both average daily rate (ADR) and occupancy rate (OCC)."

He continued, "In the second half of the year, the pace of increase in foreign tourists visiting Korea is expected to accelerate further due to the visa exemption effect for Chinese group tourists, among other factors." He emphasized, "Seobu T&D is also expected to show a performance trend of being weaker in the first half and stronger in the second half."

He also highlighted the impact of Shinhan Seobu T&D REITs, an affiliate in which Seobu T&D holds a 50% stake. He noted, "Shinhan Seobu T&D REITs, a listed REIT, owns valuable assets such as Grand Mercure in Dragon City, Incheon Square One, and Nine Tree Dongdaemun, making it a blue-chip company." He added, "Last month, it even incorporated Shilla Stay Mapo, further establishing itself as a core company with prime hotel assets in Korea." He went on to say, "The high dividend yield makes the REIT itself attractive for investment, and it is also appealing in that it plays a positive role in Seobu T&D's consolidated performance."

He further emphasized, "The possibility of a revaluation of existing assets, the rapid recovery of hotel profitability, and the decision to retire treasury shares are all factors that could further enhance the company's value."