Hotel Shilla shares experienced a significant surge on Monday, reaching a 52-week high. This impressive stock performance followed CEO Lee Boo-jin’s initiation of a planned 200 billion won ($136 million) share buyback, coupled with stronger-than-expected earnings reports. These positive developments have ignited hopes for a robust turnaround after a prolonged period of subdued growth for the luxury hotel and duty-free operator.
By 2 p.m., Hotel Shilla’s stock was trading actively at approximately 65,700 won, marking a 5.5 percent increase from Friday’s closing price. Earlier in the day, the stock had climbed even higher, touching 67,800 won, thus surpassing its 52-week peak and achieving its strongest valuation since late 2023.
Monday officially marked the commencement of CEO Lee Boo-jin’s planned share acquisition. In March, Hotel Shilla announced that Lee would acquire 470,000 shares, representing about 1.18 percent of the company’s total outstanding shares. These open-market purchases are scheduled to occur over 30 days, concluding on May 26, and are valued at approximately 20 billion won.
Investor interest in Hotel Shilla has been particularly heightened by this move, as it signifies Lee’s first direct investment in Hotel Shilla shares since assuming the CEO position in December 2010. This strategic action also aligns with the broader efforts by Hotel Shilla executives to actively demonstrate their unwavering commitment to responsible corporate management and enhancing shareholder value.
Further reinforcing this commitment, Hotel Shilla President Han In-gyu, the company’s second-highest executive, also acquired 200 million won worth of shares from the open market last month, signaling a similar vote of confidence.
These proactive efforts to boost shareholder returns are gaining substantial momentum as the Seoul-based hotel and duty-free operator continues to show clear and compelling signs of an earnings recovery. Recent financial disclosures revealed that Hotel Shilla posted an operating profit of 20.4 billion won in the first quarter, successfully swinging back to profitability from a loss incurred a year prior. Net profit also returned to positive territory, reaching 6 billion won, while total revenue saw an impressive 8.4 percent year-on-year increase, totaling 1.05 trillion won.
Local brokerage firms are increasingly recognizing the significant upside potential for Hotel Shilla, consequently raising their target prices following the company’s surprising positive earnings announcement.
On Monday, Korea Investment & Securities upgraded Hotel Shilla’s stock rating from neutral to buy. The firm also substantially lifted its price target to 100,000 won from a previous 55,000 won, citing improved earnings performance across both its duty-free and hotel businesses, alongside optimistic expectations for a recovery in tourism from China.
In a similar vein, Mirae Asset Securities and Kyobo Securities each revised their price targets upwards to 78,000 won and 80,000 won, respectively, from their prior assessment of 60,000 won, reflecting a consensus of growing confidence in Hotel Shilla’s future prospects.
jwc
