SK Securities on Tuesday raised its target price for Seobu T&D to 20,000 won from 13,000 won, a 54% increase, citing a strong hotel business and accelerating real estate development momentum. It maintained its “buy” rating.
Na Seung-du, a researcher at SK Securities, said hotel occupancy has “effectively recovered to near-full levels,” while average daily room rates still have room to rise. He added that profits from unit sales should become more visible as site development ramps up starting this year.
Seobu T&D’s hotel business has shown a clear rebound since the pandemic-era downturn, supported by an increase in foreign tourists. The Yongsan Dragon City hotel is posting high occupancy on both weekdays and weekends, staying at levels close to full capacity.
Because hotel room supply is difficult to expand quickly, SK Securities said higher room rates are likely to be a key driver of earnings improvement. It said the property’s location, hotel grade and facility quality suggest ample pricing power, and that steady demand should continue in line with stronger interest among foreign visitors to South Korea.
In real estate development, growth drivers are also coming into focus as projects at the Yongsan Najin Shopping Center site and the Seobu Truck Terminal site in Sinjeong-dong, Yangcheon-gu, move into full swing, lifting expectations for higher asset values and sales profits. The Yongsan Najin site is aiming to break ground in October, with office facilities and high-end officetels planned, and some presales expected to begin from year-end.
The truck terminal site is being pursued as a mixed-use complex combining an urban fulfillment facility with commercial, office and residential space. SK Securities said that in similar past cases, share prices tended to respond when sales profits began to materialize, suggesting the projects could become a catalyst. It added that Seobu T&D’s current valuation can be explained by hotel growth alone, and that the investment case could strengthen further if development gains are reflected.
* This article has been translated by AI.
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