Hotel Shilla earns its living from two arms: a travel-retail (duty-free) business that accounts for roughly 84% of revenue, and a hotel and leisure operation that runs the Shilla hotels in Seoul and Jeju along with the Shilla Stay chain. Its earnings therefore hinge far less on domestic consumer sentiment than on how many foreign visitors come to Korea and how much they spend. The Q1 2026 report confirmed a return to profitability, and the company is gradually exiting the high-rent airport duty-free zones to lighten its cost structure. What stands out is a mix of upside and caution: the company benefits directly whenever inbound tourism rises, the cost savings should build further through the rest of the year, and at a P/S of 0.49x the valuation is not heavy relative to revenue. Against that, a debt ratio of 320% means interest costs eat into net profit, and the duty-free environment is sensitive to shifts in Chinese consumer behavior, so the recovery may not come as fast as hoped.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt far exceeds equity (debt ratio 320.1%).
- Operating profit barely covers the interest bill (interest coverage below 1x).
- The most recent full-year net result was a loss.
- Revenue rose 3.1% year over year, and the pace is slowing (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 8.4% higher than a year earlier.
- ROE is -15.6% (controlling-interest basis). It is below the sector average.
- Operating margin is 0.3%.
- The forward P/E sits above the sector median, reflecting elevated expectations.
Ownership & governance As of 2025-12-31
Largest shareholder Samsung Life Insurance 7.3% (individual)
Controlling bloc incl. related parties 16.9%
With the controlling bloc holding 17%, control is maintained but the free float is relatively large.
🔎 In-depth analysis
- Hotel Shilla makes money from two businesses.
- The first, which accounts for the bulk of revenue (about 84%), is its travel-retail (duty-free) operation.
- Its downtown and airport duty-free stores sell cosmetics, fragrances, luxury goods and the like, and a large share of the shoppers are foreign tourists visiting Korea.
- The second is its hotel and leisure arm, which runs the Shilla hotel in Seoul, the Shilla hotel in Jeju, and the business-hotel brand Shilla Stay.
- In short, this company's results are driven far more by how many foreigners come to Korea and how much they spend than by domestic consumer conditions.
- The latest close is ₩49,050 and the market cap is ₩1.9 trillion.
- The price sits below the 20-day line (₩51,800) and below the 60-day line (₩56,012).
- Trading under both the short- and medium-term moving averages, the trend looks subdued.
- The RSI (a supplementary gauge that scores the strength of gains versus losses over the past 14 days on a 0-100 scale) is 43.5, a neutral reading.
- The price is down 12.6% over one month and up 6.3% over three months, and it stands 29.3% below its 52-week high.
- Relative strength versus the KOSPI is 32 (on a 1-99 scale that weights recent returns against the index over the past year more heavily toward the present; higher means stronger than the market), placing it in roughly the top 68% of all stocks by strength.
- Over the past three months it lagged the index by 17.0%.
- Chart readings are best viewed alongside trading volume and disclosure dates.
- There is a caveat when reading the metrics here.
- Because 2025 was a loss-making year (net loss of ₩172.8 billion), no P/E can be calculated, so last year's figures alone cannot tell you whether the company is cheap or expensive.
- The P/B is 1.74x and the P/S is 0.49x, meaning the market cap (about ₩2 trillion) is low relative to the revenue base (₩4 trillion).
- The balance sheet is somewhat heavy: the debt ratio is high at 320%, and net debt (total borrowings less cash) is about ₩944.6 billion.
- When debt is large, interest costs are heavy, so even as operating profit grows, less of it remains as net profit.
- EV/EBITDA (enterprise value including debt divided by operating profit before depreciation) is about 18.9x.
- FCF yield (the ratio of actual cash generated to market cap) is around 2.5%, meaning that even amid losses the company still produced positive cash.
- Over a long horizon, revenue has fluctuated around ₩4 trillion, while profit has swung widely with the business cycle (inbound tourism and the duty-free market).
- Net profit went from ₩86.0 billion in 2023 to minus ₩61.5 billion in 2024 to minus ₩172.8 billion in 2025, so the past two years were in the red, weighed down by intensifying duty-free competition and heavy rent costs.
- The inflection point is Q1 2026: revenue of ₩1.0535 trillion (+8.4% year on year), operating profit of ₩20.4 billion for a return to the black, and net profit of ₩6.0 billion.
- Downtown duty-free sales in particular grew at a double-digit pace, leading the recovery.
- This year, cost savings from exiting the high-rent airport duty-free zones start to feed through in earnest from Q2, coinciding with the peak inbound-tourism season in the second half.
- Evaluating this company on last year's trailing losses alone would therefore distort the picture badly; for a stock whose earnings are turning up off a bottom, a forward view is closer to the real story.
- Recent disclosures read as a shift from clearing out losses to returning to profit.
- The Q1 report in May confirmed the return to the black.
- The company is gradually exiting the high-rent airport duty-free zones to lighten its cost structure.
- In May a decision on a debt guarantee for an affiliate/subsidiary was disclosed, a point worth watching given the debt-heavy balance sheet.
- Filings on changes in the largest shareholder's holdings and several IR events also followed.
- Start with the strengths.
- This is a bellwether that benefits directly whenever inbound tourism rises.
- In Q1 2026 it did in fact return to profit, and the cost savings from exiting high-rent zones grow larger over the remaining quarters.
- The overlap of a peak-season tourism period in the second half with expectations of a group-tour recovery is also favorable, and the market cap relative to revenue (P/S of 0.49x) is not heavy.
- On the caution side, the picture is equally clear.
- A debt ratio of 320% makes the balance sheet heavy, so interest costs erode net profit.
- The duty-free environment is sensitive to shifts in Chinese consumer behavior, so the recovery may not come as quickly as hoped.
- In sum, this is a stock that is strong when inbound tourism revives and cost savings continue, and weak when the tourism recovery drags or interest burdens grow.
🔎 Valuation vs peers Inconclusive
The peer set is large retail names tied to inbound-tourism spending; department-store affiliates and major cosmetics companies overlap in the sense of consumer-goods retail.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Hyundai Department Store | 17.40x | 0.79x | 4.56% |
| Shinsegae | 423.56x | 1.32x | 0.31% |
| Amorepacific | 30.85x | 1.33x | 4.33% |
Because last year was loss-making, the company cannot be pinned as under- or overvalued on last year's earnings (no P/E can be formed), so it has to be viewed on a forward basis (this year's expected earnings). It returned to profit in Q1 2026, and the cost savings from exiting high-rent zones feed through more heavily over the remaining quarters. Reflecting that recovery, an internally estimated forward P/E is about 23x, sitting between the consumer-goods peers (Hyundai Department Store in the 19x range, Amorepacific in the 29x range). The P/S (market cap relative to revenue) is 0.49x, not heavy relative to the revenue base. That said, earnings have only just begun to recover and the balance sheet carries some strain, so rather than declaring the stock under- or overvalued either way, we leave it inconclusive.
Price history Close · MA20 · MA60
The latest close is ₩49,050 and the market capitalization is ₩1.9 trillion. The price sits below its 20-day moving average (₩51,800) and below its 60-day moving average (₩56,012). It is under both its short- and medium-term moving averages, so the trend looks subdued. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 43.5, a neutral level. The one-month change is -12.6%, the three-month change is +6.3%, and the position relative to the 52-week high is -29.3%. Relative strength versus the KOSPI is 32 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 32% of all stocks. Over the past three months it lagged the index by 17.0%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -17.01% / 6M -31.90% / 12M -59.22%
Key metrics vs sector median
Valuation
A net loss makes the P/E an unreliable valuation gauge. The P/B of 1.74x is above the sector median (0.56x).
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Profitability & financials
Return on equity (ROE) is -15.6%, below the sector average (3.0%). The operating margin is 0.3%. The debt ratio is 320.1%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $2.4B | $2.6B | $2.7B | +3.06% ↓ slower |
| Operating profit | $60.5M | -$3.4M | $9.0M | — |
| Net profit | $57.0M | -$40.8M | -$114.6M | — |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $2.5B | $3.3B | $2.4B | $2.6B | $2.7B |
| Operating profit | $78.7M | $51.9M | $60.5M | -$3.4M | $9.0M |
| Net profit | $17.9M | -$33.2M | $57.0M | -$40.8M | -$114.6M |
| Revenue CAGR | 4-yr avg 1.86% | ||||
Revenue rose 3.1% year over year (2023 ₩3.6 trillion → 2024 ₩3.9 trillion → 2025 ₩4.1 trillion), and the three-year trend is 'rising'. That said, the pace of growth slowed from the prior year. Over the 5 years on record, revenue compound annual growth (CAGR) is 1.9%. The two-year revenue CAGR is 6.8%. In the most recent quarter (Q1 2026), revenue was 8.4% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- —
Points to watch
- Debt far exceeds equity (debt ratio 320.1%).
- Operating profit barely covers the interest bill (interest coverage below 1x).
- The most recent full year was a loss, so it is worth checking whether profitability recovers.
- Revenue rose 3.1% year over year, and the pace is slowing (3-year trend: rising).
- The price is high versus peers, so expectations already appear priced in.
Recent news & events searched · sourced
- 2026-05-15EarningsQ1 2026 quarterly report. Revenue of ₩1.0535 trillion (+8.4% year on year), operating profit of ₩20.4 billion for a return to the black, and net profit of ₩6.0 billion.Confirms the inflection point where loss-making results turned to profit. With both the duty-free and hotel arms improving together, the near-term direction is positive. Source
- 2026-06-08IRIR event notice. With earnings recovering, the company explains its business situation and strategy to the market.Stronger communication about the recovery phase, affecting confidence in earnings over the medium term. Source
- 2026-05-12UpdateDecision on a debt guarantee for a third party. A guarantee tied to a related company, linked to the balance-sheet burden.A point to check from a financial-risk standpoint given the already high debt ratio. Source
- 2026-06-01FilingFiling on changes in holdings by the largest shareholder and others, plus a large-business-group status disclosure. Routine disclosures on governance and ownership.Confirms governance stability. The direct impact on earnings is limited. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| Q1 2026 revenue | 1₩53.5 billion (base quarter.revenue 1,053,491,831,261) | 1₩53.5 billion | Confirmed | link |
| Q1 2026 operating profit | ₩20.4 billion (base quarter.op_income 20,415,282,258) | ₩20.4 billion | Confirmed | link |
| 2026 net profit estimate | approx. ₩85.0 billion (self-estimate, forward PER approx. 23x) | — | Unverified | link |
Recent filings
- 2026-06-08Disclosure
- 2026-06-01OwnershipLargest-shareholder ownership change report
- 2026-06-01Corporate governance report
- 2026-06-01Disclosure
- 2026-06-01Large-business-group status disclosure
- 2026-05-27OwnershipOwnership-change filing
- 2026-05-26Disclosure
- 2026-05-15PeriodicQuarterly report
- 2026-05-12Disclosure
- 2026-05-04OwnershipOwnership-change filing
- 2026-04-30OwnershipLargest-shareholder ownership change report
- 2026-04-29OwnershipOfficers'/major-shareholders' holdings report
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.