[Market Focus] Seobu T&D Up 6% as Earnings Improvement Continues

Shares of Seobu T&D are showing strong performance as the company continues its trend of improved earnings, driven by the growth of its hotel business division in the second quarter. As of 9:32 a.m. on August 26, Seobu T&D was trading at 9,710 won, up 550 won (6.00%) from the previous trading day.

On this day, IBK Investment & Securities commented on Seobu T&D, stating, "The company has demonstrated its fundamental strength through its second-quarter results," and predicted, "Record-high earnings are expected in the second half of the year."

On a consolidated basis, Seobu T&D posted second-quarter sales of 54.6 billion won, up 16.4% year-on-year, and operating profit of 11.2 billion won, an increase of 25.8% compared to the same period last year.

Nam Sung-hyun, a researcher at IBK Investment & Securities, analyzed, "The improvement in operating performance was driven by the growth of the hotel business division. While Square One's operating profit decreased by 14.9% year-on-year, the hotel business division's operating profit rose to 6.7 billion won, up 26.4% from the previous year." He cited several reasons for the positive results: ▲ increased demand due to a rise in foreign visitors to Korea ▲ higher average daily room rates (ADR) as hotel supply remained limited ▲ the onset of the seasonal peak period ▲ effects from the inclusion of assets from consolidated subsidiaries.

Researcher Nam added, "The earnings growth trend is expected to continue in the second half of the year," explaining, "This is because the approval of visa-free entry for Chinese visitors is likely to further boost demand from foreign tourists visiting Korea, and the upward trend in ADR in the Seoul area is expected to persist."