NH Investment & Securities on the 19th said West T&D's earnings next year are likely to improve, citing growth in the hotel institutional sector from an increase in foreign tourists and profits from land development. It maintained a "Buy" investment rating and raised the target price to 16,000 won from 13,500 won. West T&D closed the previous trading day at 12,250 won.
Moon So-young, an analyst at NH Investment & Securities, said Dragon City stands to benefit in earnest if demand for hotel rooms in Seoul expands on the back of rising foreign inbound travelers and Airbnb regulations in 2026. Moon said, "The occupancy rate (OCC), currently around 70%, has room to climb to as high as the low-to-mid 90% range."
Rising average daily rate (ADR) is also expected to support an improvement in hotel institutional sector results. Moon said, "Even though the ADR rise in the fourth quarter this year is 10%, higher than expected, the 2025 ADR will still be in the high 100,000 won range," adding, "With a weaker exchange rate, the burden of room rates has eased." Accordingly, Moon projected, "Thanks to operating leverage, the hotel institutional sector operating margin will hit a record high of 42%."
Profit realization from development in land assets is also expected to begin in earnest. Moon noted, "If building permits are granted for the Najin Shopping Center and the Sinjeong-dong site in the first half of next year, uncertainties related to land development will be resolved."
The Najin Shopping Center is slated to break ground in the second half, with proceeds from officetel pre-sales to start flowing in, and development profits could begin to be recognized from the second half of 2026. The Sinjeong-dong site is expected to start construction in 2027, with the scale of development profits gradually expanding. Samsung C&T is highly likely to handle construction of the multifamily housing, and considering the shortage of housing supply in Seoul, pre-sale performance is also expected to be solid.