Hana Securities projected on 4th that GS P&L will continue its growth trend due to the structural boom stemming from increased demand in the hotel industry and a shortage of supply.
Hana Securities newly set a buy rating on GS P&L and a target price of 67,000 won, which is 14% higher than the previous closing price of 47,450 won.
GS P&L is a corporation that was re-listed after a spin-off from GS Retail, with Parnas Hotel and Fresh Meat as subsidiaries. As of the first half of this year, the revenue ratio is 84% from Parnas Hotel and 16% from rental income (Parnas Tower).
GS P&L owns the five-star hotel 'Grand InterContinental Seoul Parnas', and the Coex Hotel, which used to use the same brand, is currently being remodeled under the Westin brand. The company also operates a total of six business hotels under the Nanta Tree brand in Myeongdong, Insadong, Dongdaemun, Pangyo, and Yongsan.
Seohyun Jeong, a researcher at Hana Securities, noted that GS P&L not only owns the largest hotel in the core area of Seoul but also expects its performance to increase sharply as the Westin hotel finishes renovation and opens.
She said, "Although the number of rooms in the newly opening Westin hotel will decrease from 656 to 564, the average daily rate (ADR) is expected to rise by more than 50% compared to before," adding, "If normalized, the revenue scale could expand to 200 billion won."
According to the researcher, GS P&L's profits are expected to increase as average daily rates rise. She projected that the company's annual operating profit will grow from 85.3 billion won this year to 130.5 billion won in 2026 and 147.8 billion won in 2027.
The researcher explained that the target price of 67,000 won was calculated based on a price-to-earnings ratio (PER) of 20 times the expected profit in 2027. She noted, "As Chinese tourists are expected to return in full force, additional growth potential is anticipated; thus, a PER of 20 times was applied," and added, "Given the significant improvement and visibility in hotel performance, it is possible to reflect future earnings in the stock price ahead of time." She continued, "If assessed based on real estate value (1.2 trillion won), additional corporate value enhancement is also possible."