NH Investment & Securities analyzed on the 12th that Lotte Shopping has improved its financial structure through last year's asset re-evaluation, and the profitability of major institutional sectors is also recovering. It raised the target stock price from the previous 80,000 won to 90,000 won while maintaining a 'buy' investment opinion. The closing price of Lotte Shopping on the previous trading day was 72,100 won.
In the first quarter of this year, Lotte Shopping's sales decreased by 2% compared to the previous year, recording 3.4568 trillion won, while operating profit increased by 29% to 148.2 billion won, exceeding the projections of the securities industry. Despite poor clothing sales due to unfavorable weather, operating profit rose by 39% due to the effect of reduced depreciation and the low baseline performance from the same period last year.
Joo Young-hun, a researcher at NH Investment & Securities, noted, 'Although discount store operating profit decreased compared to the same period last year, this is not a matter of concern as it is expected to result from taking over the loss-making e-grocery business from the e-commerce division.'
Although the financial results of major subsidiaries such as LOTTE HIMART and home shopping have mostly improved, NH Investment & Securities pointed out that the switch to a deficit for Lotte Cultureworks due to the absence of hit projects is disappointing. The lead researcher stated, 'However, on the 8th, Lotte Cultureworks and Megabox Central signed a memorandum of understanding (MOU) for merger, and once the merger is completed, the financial results related to Lotte Cultureworks are expected to be excluded from the company's consolidated performance.'
The lead researcher positively evaluated that Lotte Shopping's dividend yield is at 5.3%, which is high compared to the industry average. He said, 'Considering that the sales performance of major domestic institutional sectors is improving, along with the reduced depreciation due to last year's impairment losses and the expanded contribution from overseas business sectors, the possibility of achieving this year's target of 60 billion won in consolidated operating profit for Lotte Shopping is high.'