Hotel Shilla shares surged Monday to a 52-week high after CEO Lee Boo-jin began a planned 200 billion won ($136 million) share buyback, and stronger-than-expected earnings fueled hopes for a turnaround after a prolonged period of lackluster growth.
The stock closed Monday at 66,100 won, up 6.1 percent from Friday's close. It had climbed as high as 67,800 won earlier, breaking its 52-week high and reaching the strongest level since late 2023.
Monday marked the first day of Lee's planned purchase. In March, Hotel Shilla disclosed that Lee would buy 470,000 shares, about 1.18 percent of the company's total shares, through open-market purchases over 30 days ending May 26. The purchase is valued at about 20 billion won.
Investor interest was especially strong as the move marked Lee's first direct investment in Hotel Shilla shares since she took the helm as CEO in December 2010. It also comes as Hotel Shilla executives step up efforts to demonstrate their commitment to responsible management and shareholder value.
Hotel Shilla President Han In-gyu, the company's No. 2 executive after Lee, also bought 200 million won worth of shares in the open market last month in a similar gesture.
Efforts to boost shareholder returns are gaining traction as the Seoul-based hotel and duty-free operator shows clearer signs of an earnings recovery. Recent disclosures showed the company posted an operating profit of 20.4 billion won in the first quarter, swinging to the black from a loss a year earlier. Net profit also returned to positive territory at 6 billion won, while revenue rose 8.4 percent on-year to 1.05 trillion won.
Local brokerages are also seeing more upside for Hotel Shilla, raising their target prices after the earnings surprise.
Korea Investment & Securities on Monday upgraded the stock to buy from neutral and lifted its price target to 100,000 won from 55,000 won, citing improved earnings at the duty-free and hotel businesses and expectations for a recovery in China.
Mirae Asset Securities and Kyobo Securities each lifted their targets to 78,000 won and 80,000 won, respectively, from 60,000 won.
By Choi Ji-won (jwc@heraldcorp.com)
