[Click eStock] "Paradise, Concerns Over Potential Turn to Deficit... Target Price ↓"

[Asia Economy Reporter Park Ji-hwan] Hana Financial Investment forecasted on the 3rd that Paradise may turn to a deficit this year due to the impact of the novel coronavirus infection (COVID-19). Accordingly, the investment opinion of 'Buy' was maintained, but the target stock price was lowered by 14.3% from the previous 21,000 KRW to 18,000 KRW. The target stock price was lowered once again in just one week.

Lee Ki-hoon, a researcher at Hana Financial Investment, explained, "The reason for lowering the target stock price twice recently is that from the 1st, a new variable of a 2-week self-quarantine measure for foreigners entering the country was added, and assuming this variable continues until May," adding, "Before May, the performance volatility is expected to be quite high depending on the easing of COVID-19 or foreigner self-quarantine issues, and employment support for dealer positions."

The current stock price is in an undervalued range that is hard to express in words, but the rebound trigger is expected to be the point when normal business operations become possible.

Researcher Lee Ki-hoon stated, "From April, foreigners entering the country are subject to a 2-week self-quarantine, and a 15-day visit schedule is required to enjoy a one-day game," adding, "If there are no changes, the drop amount in April and May is expected to be below minus 90%, indicating a difficult business environment."

Paradise's expected sales for the second quarter are forecasted to decrease by 62% compared to the previous year to 89.2 billion KRW, and operating profit is expected to turn to a deficit of 63.3 billion KRW.

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