We expect Hotel Shilla to return to the black with an OP of W50bn in FY21F, but continued dependence on Chinese daigous should depress its OPM. Korea DFS faces a threat from Hainan DFS’s growth, which should limit Hotel Shilla’s sales growth to 15% p.a. in FY22-23F (vs. 28% p.a. in FY18-19). We downgrade the stock from Add to Hold, with a lower TP of W89k, based on 23.5x FY22F P/E. This note marks the transfer of coverage to Jiwon Lee.