Bright Start of the Year with Smiling Foreign Casino Stocks

Stock Prices Soar with Paradise Reaching New Highs Amid Recovery in Chinese VIP Demand

[Asia Economy Reporter Eunmo Koo] The momentum of foreigner casino stocks is fierce at the beginning of the year. It is analyzed that the easing of the US-China trade conflict and expectations for the lifting of China's Hanhanryeong (Korean Wave ban) have led to a recovery in demand from Chinese VIPs, influencing the rise in stock prices.

According to the Korea Exchange on the 13th, on the 10th, Paradise's stock price closed at 21,150 KRW, up 3.68% (750 KRW) from the previous trading day, marking a 52-week high. GKL also closed the session at 21,250 KRW, up 2.16% (450 KRW).

Paradise has recorded a 7.1% return since the beginning of this year, and since the early August low of last year (13,800 KRW), it has risen 53.3%, showing a continuous upward trend. On the same day, as of 9:30 AM, it rose to 21,750 KRW, setting a new high. GKL also continues a positive stock price trend with a 9.3% return this year.

The increase in Chinese VIPs is evaluated as the driving force behind the stock price rise, with expectations that it will lead to improved earnings. The number of Chinese VIP visitors at four casinos in the metropolitan area (two each of Paradise and GKL) increased by 20%, from 68,000 in 2018 to 82,000 last year. The average monthly number of Chinese VIP visitors to metropolitan casinos was in the 6,000 range in the first half of last year but increased to the 7,000 range in the fourth quarter.

Lee Ki-hoon, a researcher at Hana Financial Investment, said, "The core of the Asian casino industry and stock prices is the gaming demand of Chinese VIPs," adding, "The recovery of demand from Chinese VIPs due to the easing of the US-China trade conflict and the inbound recovery mood following the THAAD (Terminal High Altitude Area Defense) thaw inevitably lead to an upward trend in the performance of domestic foreigner casinos."

According to financial information company FnGuide, Paradise's fourth-quarter sales last year are estimated to have increased by 23.8% year-on-year to 268.2 billion KRW, with operating profit turning positive to 20.2 billion KRW. During the same period, GKL is also expected to record sales of 132.6 billion KRW and operating profit of 28.6 billion KRW, representing increases of 18.6% and 253.1%, respectively.

The improving performance trend is expected to continue this year. Namsoo Lee, a researcher at Kiwoom Securities, analyzed, "As expectations for the lifting of Hanhanryeong materialize, all casino-related indicators such as customer attraction, drop amount, and hold rate will improve," adding, "In particular, GKL is expected to target performance levels from 2013 to 2016, its peak season, influenced by the return of Chinese tourists."

This content was produced with the assistance of AI translation services.