Lotte Group Chairman Dong-bin Shin has sold part of his stake in Lotte Shopping (023530), cutting his holding below 10%.
Shin sold 118,180 shares on the open market on the 28th and 31st of last month and on the 1st, according to the electronic disclosure system. Based on a weighted average price of 107,065 won — the total value of shares traded during the period divided by total volume — the sales were worth about 12.65 billion won ($8.7 million).
The transactions reduced Shin's stake in Lotte Shopping to 9.81% from 10.23%. In July, Shin disclosed plans to sell 324,100 shares, or 1.15% of the company. He intends to sell another 205,920 shares. Shin cited securing liquidity as the reason for the disposals.
Shin received 3.33 billion won in compensation from Lotte Shopping in the first half, consisting of 2.07 billion won in salary and 1.26 billion won in bonuses. His salary was calculated under the company's executive pay rules, which factor in rank, length of service, position and contribution to the company. It included base pay, position-based pay and performance pay that varies according to the prior year's results. The bonus reflected corporate results including revenue and operating profit, as well as leadership, ethical management and other contributions.
Lotte Shopping posted first-half consolidated revenue of 3.485 trillion won and operating profit of 89.9 billion won. Revenue rose 4% from a year earlier, while operating profit jumped 121.2%. Net profit swung to a surplus of 14.6 billion won.
Brokerages have nonetheless cut their target prices for Lotte Shopping despite the strong results. Hana Securities lowered its target price to 140,000 won from 180,000 won in a report on the 27th of last month. "Lotte Shopping has overcome 15 years of weak earnings and is in a company-wide turnaround," analyst Park Jong-dae said. "But we have adjusted the appropriate price-to-earnings ratio for the department store division to 10 times, reflecting the decline in market valuations."
Park Jong-ryul, an analyst at Heungkuk Securities, also cut his target price to 150,000 won from 220,000 won last month, noting that "excessive net borrowings and interest costs limit the extent to which higher operating profit translates into improved earnings per share."
