[Click eStock] "Lotte Innovate Target Price Raised on Full-Fledged Entry into Robotics Business"

IBK Investment & Securities announced on the 3rd that it is maintaining its "Buy" rating on Lotte Innovate and has raised its target price to 30,000 won.

Lee Seunghoon, a researcher at IBK Investment & Securities, stated, "The company's valuation should be reassessed, as it is expected to lead the group's robotics industry this year and see a sharp increase in operating profit." He analyzed, "Lotte Innovate is making a full-fledged entry into the robotics business by applying its artificial intelligence (AI) platform 'Aimember' to Unitree Robotics, a leading company in China's robotics industry."

He added, "Through this business, the company is currently conducting proof of concept (POC) based on its broad business areas such as distribution and logistics to enhance productivity within the group, and visible results are expected this year."

The researcher explained, "The subsidiary EVSIS reduced its deficit to about 6 billion won last year, nearly halving it from the previous year's 13.3 billion won. This year, there is a high possibility of top-line growth and improved profitability as the company expands into overseas markets such as North America, Southeast Asia, and Japan. In addition, four data centers have reached maximum operating capacity, and the company is simultaneously considering new power permits for additional centers and expanding external operations, so further performance growth is anticipated."

Operating profit is also above consensus. The researcher said, "Lotte Innovate's sales in the fourth quarter of last year were 327.3 billion won, in line with consensus, but operating profit was 9.8 billion won, exceeding the consensus of 8.6 billion won." He added, "On the profit side, EVSIS's winning of projects from the Ministry of Climate, Energy and Environment significantly contributed to profit improvement."

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