[Edaily Reporter Kwon Oh Seok ] HEUNGKUK METALTECH CO.,LTD. announced on the 1st that it is maintaining its “Buy” investment rating for HotelShilla(008770)but lowering its target price from 80,000 won to 65,000 won.

Park Jong-ryul, an analyst at HEUNGKUK METALTECH CO.,LTD., stated, “In contrast to the surge in foreign visitors to Korea, growth in duty-free store sales remains limited,” adding, “This is primarily due to the weakening competitiveness of the duty-free sector caused by the depreciation of the won and changes in foreign shoppers’ behavior.”
The company is projected to post solid operating results for the second quarter on a consolidated basis, with revenue of 1.0 trillion won (down 0.9% year-over-year) and operating profit of 506억 won (up 484.7%), continuing the positive trend from the previous quarter. He explained, “This is due to the low base effect from last year, coupled with robust profit generation in the hotel and leisure sectors and the duty-free segment’s return to profitability.”
He added, “In the case of duty-free stores, under a profitability-focused management strategy, discount rates across all outlets are being managed efficiently, and the total discount rate is expected to stabilize in the mid-30% range.” He further elaborated, “In the hotel and leisure sector, rising average room rates driven by increased demand from foreign visitors to Korea will be the main factor behind the improvement in performance.”
The company revised its full-year consolidated forecast to 4.1 trillion won in revenue (+0.8%) and 179.2 billion won in operating profit (+1,226.4%). He explained, “This is due to robust profit generation in the hotel and leisure segment, coupled with improved performance in the duty-free business,” and predicted, “With a positive business environment—including reduced rent burdens following the withdrawal from DF1 at Incheon International Airport and an increase in the number of foreign visitors—combined with profitability-focused discount rate management, the duty-free business’s profitability improvement is expected to be sustainable.”
He continued, “The trend of improved performance is expected to continue due to rising hotel occupancy rates and average room rates,” but noted, “It is disappointing that, despite a sharp increase in foreign visitors to Korea (8.72 million, +21.0%) from the start of the year through May, duty-free sales have remained virtually flat (5.3 trillion won, +1.3%).”
Analyst Park added, “While we are raising our earnings forecasts for 2026–2027, we are lowering the target price in line with a multiple adjustment,” and noted, “Going forward, the company must combine a proactive commitment to expanding shareholder returns with active efforts to enhance corporate value.”