Ask Warren

JONBUR Research · Initiation

Lotte Reit · 330590 · Real estate

Lotte Reit: Steady Revenue Growth and 5.8% Dividend Yield, but Thin Earnings Returns and a Low Model Estimate

Why this report

Start of coverage: one of the 300 largest companies, written once its financial statements were in.

Lotte Reit's revenue has grown each year since 2021 and its operating margin is 66.1%, but ROE is only 1.8% and the P/E is 58.1. The valuation model's base estimate of ₩1,990 per share is well below the ₩4,120 close on 2026-10-12.

Written Oct 13, 2026 · Data as of Oct 12, 2026 · 0 views

This is not financial advice. The report does not recommend buying or selling anything.

XfWATGr/in@

Thesis

The data supports a picture of a stable, rent-like revenue base: revenue rose from ₩56.2B in 2021 to ₩70.9B in 2025, and operating margin improved from 58.3% to 65.3%. Trailing free cash flow of ₩66.1B and a dividend yield of 5.8% point to meaningful cash generation relative to a ₩1.19T market cap.

What the data does not support is strong profitability after financing costs. Net margin is 27.5% and ROE is 1.8%, because borrowings of ₩937.0B absorb much of the operating profit. Net income has also been volatile, from ₩18.4B in 2021 to ₩3.2B in 2023 and ₩19.6B in 2025. The share price is up 18.2% over three months and 5.9% over one year, and sits about 15.9% below its 52-week high of ₩4,900.

Business overview

Lotte Reit (code 330590) is a real estate investment company listed on KOSPI. It was founded on 2019-03-29 and listed on 2019-10-30. It has 288,968,884 listed shares and a market cap of about ₩1.19T. The data names Lotte AMC (롯데에이엠씨 주식회사) as its CEO entity. The data does not describe its property portfolio, tenants or occupancy. Among listed REIT peers in the data, SK Reit is larger by market cap at ₩1.43T, while Hanwha Reit (₩966.2B), Shinhan Alpha REIT (₩662.8B), ESR Kendall Square Reit (₩647.8B) and SamsungFN Reit (₩468.9B) are smaller.

Financial analysis

These figures come from filed financial statements (DART). For the twelve months to H1 2026, revenue was ₩74.5B, operating income ₩49.3B and net income ₩20.5B. That gives an operating margin of 66.1% and a net margin of 27.5%.

Annual revenue growth was 10.5% in 2024 and 8.0% in 2025. Operating income rose from ₩42.0B in 2024 to ₩46.3B in 2025. Net income was ₩10.6B in 2024 and ₩19.6B in 2025. ROE has stayed low: 1.7% in 2025 and 1.8% on a trailing basis.

On the balance sheet, liabilities to equity is 158.7%, borrowings are ₩937.0B and cash is ₩39.2B. Trailing free cash flow is ₩66.1B. Filings in late September and early October 2026 show repeated borrowing-related disclosures. The data does not give their terms.

Valuation

At the current price, the P/E is 58.1, P/B 1.1, price-to-sales 16.0 and dividend yield 5.8%. Enterprise value is ₩2.09T. EV/EBITDA is not available. The year-end 2025 P/E was 58.3 and P/B 1.0, so the multiples are close to that level. Earlier year-end multiples are not available.

Among peers, only SK Reit has multiples in the data, at a P/E of 44.2 and P/B of 0.7. Lotte Reit's P/E and P/B are both higher than SK Reit's. The other peers have no multiples available.

The valuation model (5-year discounted cash flow, 4.5% rate, TTM to H1 2026) gives a model estimate of ₩1,990 per share in the base case, ₩0 in the bear case and ₩7,011 in the bull case. This is a model estimate based on the assumptions shown, not a target. The base case is well below the ₩4,120 price, and the wide bear-to-bull range shows how sensitive the result is to assumptions.

Catalysts

  • An investor relations (IR) event is listed in filings for 2026-10-13, which may add company information.
  • A securities registration statement was filed on 2026-10-07, amended and had its terms set on 2026-10-12, which points to a capital raise whose details are not in the data.
  • Several real estate investment company borrowing filings between 2026-09-29 and 2026-10-07 could change the debt profile or financing costs.
  • Annual general meeting results were filed on 2026-09-29.
  • Insider shareholding reports were filed on 2026-10-01 and 2026-10-08.

Risks

  • Borrowings of ₩937.0B and liabilities to equity of 158.7% leave earnings exposed to financing costs.
  • ROE of 1.8% and a P/E of 58.1 mean the price rests on factors other than current earnings.
  • Net income has been volatile, ranging from ₩3.2B in 2023 to ₩20.5B on a trailing basis.
  • A new securities offering could add shares, and its size and terms are not in the data.
  • Investor flows, foreign ownership, short balance and news are not available, which limits visibility into market sentiment.

Closing view

The data shows a business with growing revenue, a high operating margin, solid free cash flow and a 5.8% dividend yield. It also shows heavy borrowing, a low ROE and a P/E of 58.1 that is higher than the one peer with comparable data. The model estimate of ₩1,990 per share in the base case sits well below the current ₩4,120 price, though the ₩0 to ₩7,011 range shows that the estimate depends heavily on its assumptions. The pending securities registration and the borrowing filings are the main items to watch, and their details are not in the data.

Model estimate of fair value

Bear
₩0
-100%
Base
₩1,990
-53%
Bull
₩7,011
+65%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Base case of the 5-year discounted cash flow model on the stock's Valuation tab (statements TTM to H1 2026; discount rate 4.5%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

Report history

  1. Oct 13, 2026InitiationStart of coverage (300 largest)Lotte Reit: Steady Revenue Growth and 5.8% Dividend Yield, but Thin Earnings Returns and a Low Model Estimate

Built only from jonbur's own data: prices and investor flows, filed financial statements and filings, and news headlines. Disclosed (filed) data is labelled as such. Written by AI and may contain mistakes.

This is not financial advice. The report does not recommend buying or selling anything.

Source: KRX statistical information