NH Investment & Securities on the 5th said GS P&L is expected to be the biggest beneficiary of booming inbound travel. It kept a Buy rating and a target price of 81,000 won. GS P&L's previous closing price was 44,850 won.
Lee Hwa-jung, a researcher at NH Investment & Securities, said, "As it has a hotel-centered business model, it is a player expected to be the biggest beneficiary of inbound growth."
In particular, it said the hotels it owns are clustered in locations favored by tourists, such as Gangnam, which has major venues downtown and the city airport terminal, differentiating the company in terms of room occupancy (OCC) stability and average daily rate (ADR) growth.
The recent stock underperformance was analyzed as being affected by low market interest in small caps.
The researcher said, "With revenue metrics growing fast and operating expense stabilization accompanying that, peak-season leverage will be maximized," adding, "A share-price rebound is a matter of time."
For second-quarter results this year on a consolidation basis, revenue is projected at 156.2 billion won and operating profit at 22.4 billion won. These represent increases of 39% and 93%, respectively, from a year earlier, and are expected to be in line with the consensus (the market's average estimate).
The researcher analyzed, "Although there was a temporary operating gap due to the renovation of rooms in the west wing of Jeju Parnas through May, revenue that grew alongside rising ADRs across venues will offset the related impact."
It also assumed that annual property taxes would rise by the mid-10% range from a year earlier.
For five-star venues, a steep ADR increase is expected, centering on venues near the city airport terminal. The pace of business normalization at The Westin Seoul, which reopened in Sep. last year, is also exceeding the initial expectations, according to the researcher.
For Nine Tree Hotel, it said ADR gains are continuing, centering on venues near tourist areas such as Myeong-dong, Insa-dong, and Dongdaemun, but that demand is forming mainly on weekends because the share of short-haul visitors from China and Japan and of domestic guests is high.