Kiwoom Securities initiated coverage of Seobu T&D (KOSPI: 006730) on the 1st, arguing that improving performance in its hotel division, driven by a surge in inbound tourism, is set to continue.
The brokerage forecasts the company's full-year revenue at 303.3bn won, up 21% year on year, with operating profit reaching 86.4bn won, a 23% increase. It expects an operating margin of 28.5%.
Seobu T&D operates across property development, hotel management, and shopping-mall operations. In the first quarter of this year, tourism hotels accounted for 59% of consolidated revenue, tableware manufacturing and sales for 27%, and shopping-mall operations and other activities for the remaining 14%.
The company's crown jewel is Seoul Dragon City, a large-scale complex in Yongsan with roughly 1,700 hotel rooms, a casino, and convention facilities. In the first quarter, revenue from the hotel division rose 13% year on year to 38.7bn won, while operating profit surged 63% to 14.2bn won.
The broader tourism backdrop is supportive. According to South Korea's Ministry of Culture, Sports and Tourism, the cumulative number of foreign visitors to the country provisionally exceeded ten million by the third week of June. Through May, inbound arrivals stood at 8.72 million, up 21% on the same period last year.
Longer-term growth prospects hinge on two development projects. The Najin Shopping Arcade is expected to begin contributing meaningfully to revenues after 2027, once building permits are secured. A planned urban advanced-logistics complex in Sinjeong-dong is targeted for construction-permit approval this year, with groundbreaking scheduled for 2027.
Despite the healthy operating outlook, the share price tells a different story. As of 30th June, Seobu T&D traded at 9,650 won, down 48.1% from this year's intra-day high of 18,580 won. Kiwoom Securities attributes the underperformance to a broader market rotation into semiconductor stocks, leaving the company in what it describes as an undervalued phase.