[Stock in Focus] Lotte INNOVATE Rises 3.75% on New Business Prospects and Undervaluation Appeal

The stock price of Lotte INNOVATE, which is gaining attention for securing new business growth engines and for its undervalued share price, is on the rise.

As of 9:19 a.m. on March 18, Lotte INNOVATE was trading at 23,500 won, up 3.75% from the previous trading day.

On this day, Hanyang Securities assessed that Lotte INNOVATE is entering a full-fledged phase of qualitative growth, based on securing new growth engines and improving the profitability of its subsidiaries.

Lee Junseok, a researcher at Hanyang Securities, analyzed that Lotte INNOVATE's data center business is the strongest profit source within its core operations and a key driver of mid- to long-term growth. Currently, the company operates four data centers, including the Lotte Group Integrated Center, and is evolving into a comprehensive solutions provider through the DBO (Design-Build-Operate) model, which oversees design, construction, and operation.

He stated, "The DBO model, in which client companies bear the capital risk while the company secures long-term operating rights, is a core strategy for achieving low-risk, high-return results," adding, "Lately, the participation in the edge data center construction project by IGIS Asset Management is a case in which Lotte INNOVATE's operational know-how has been recognized, and future revenue growth is expected."

The normalization of profitability in its subsidiaries is also a positive factor. The electric vehicle charging subsidiary, EVSIS, minimized losses last year even as competitors posted large-scale deficits, and this year is expected to further reduce its losses to 6 billion won. In particular, the fact that the electric vehicle charging company CHAEVI, which is scheduled to go public next month, is valued at a minimum of 585.6 billion won underscores the undervaluation appeal of Lotte INNOVATE.

The robot business was cited as a future value growth factor. By leveraging the group’s vast data and distribution network, the company is building a physical AI and RaaS (Robotics as a Service) model that combines an artificial intelligence (AI) platform with physical robots, which is expected to reduce costs at logistics and distribution hubs.

Researcher Lee emphasized, "As the turnaround in new businesses combines with the stability of core operations, the market's re-evaluation is expected to accelerate further," adding, "With the current market capitalization at only 342.7 billion won, the company is in a distinctly undervalued segment."

This content was produced with the assistance of AI translation services.