[Click eStock] "GS PNL Expected to Deliver Strong 2Q Results...Target Price Maintained"

IBK Investment & Securities has maintained its "Buy" rating and target price of 76,000 won for GS PNL, stating that the company's second-quarter operating results are expected to exceed market estimates.

According to IBK Investment & Securities on July 8, GS PNL's second-quarter revenue is estimated at 167.5 billion won, with operating profit expected to reach 26 billion won. These figures represent year-on-year increases of 49.3% and 124.9%, respectively.

Nam Sung-hyun, an analyst at IBK Investment & Securities, stated, "Operating profit is projected to exceed the market consensus of 23.5 billion won by around 10%." He cited the following factors as the basis for the positive outlook: a sharp increase in demand from inbound foreign tourists, a full-scale profit increase from the normalization of Westin Parnas operations, higher occupancy rates and average daily rates at Nine Tree, and accelerated performance growth at Parnas Jeju driven by a surge in visitors to Jeju and expanded foreign demand.

Nam also noted, "While there are expected impacts from banquet hall renovations, partial room maintenance at Parnas Jeju, and higher property taxes in the second quarter, operating performance improvements may more than offset these." He added, "The operating results of Westin Parnas are crucial for GS PNL, and its second-quarter occupancy rate exceeds 80%. Although it is still difficult to say that operations have fully normalized, excluding amortization expenses, operating profit should be comparable to Grand IC's first-quarter results."

The previous day, GS PNL shares closed at 41,850 won. With a target price of 76,000 won, this suggests more than 80% potential upside from current levels.

Strong inbound tourism demand is seen as a key factor underpinning the maintained target price. Second-quarter demand from foreign visitors to Korea is estimated to have grown by 20% year-on-year. Nam commented, "Given that the combined inbound demand in April and May reached around 4 million, it is highly likely that hotel demand increased even further in the second quarter. Therefore, it is reasonable to conclude that occupancy rates and average daily rates exceeded those of the first quarter." He affirmed, "We maintain our Buy rating and target price of 76,000 won for the company."

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