[Click eStock] "Kangwon Land, Limited Downside Potential in Stock Price"

[Asia Economy Reporter Oh Ju-yeon] Meritz Securities expects that Kangwon Land's performance in the third quarter of this year will slightly improve compared to the worst second quarter. Additionally, it forecasted that if the COVID-19 vaccine schedule becomes visible, the stock attractiveness of leisure operators will increase, and thus the downside potential of Kangwon Land's stock price is limited.

According to Meritz Securities on the 19th, Kangwon Land's consolidated sales for the third quarter of this year are expected to be 51.1 billion KRW, down 87.4% compared to the same period last year, and operating profit is expected to turn to a loss of -87.8 billion KRW. Kangwon Land's membership gaming floor operated for only 53 days in the third quarter, while the general gaming floor opened only slot machines and electronic tables from July 20, and general tables started operating from August 3. However, due to the spread of COVID-19 in August, the facility was closed from August 23 to October 11, resulting in an actual operating period of only 20 days. The recovery of the utilization rate of general tables is analyzed to be the key to sales recovery.

Kangwon Land, which resumed operations from the 12th, is currently operating the membership gaming floor (VIP) and part of the general gaming floor. For the general gaming floor, similar to the limited operations in July, only some slot machines and electronic tables are open, and general tables are expected to operate later as in August.

Researcher Lee Hyo-jin said, "The characteristic of casinos lies in the inelasticity of demand," and added, "With the upcoming announcement of Phase 3 clinical trial results for the COVID vaccine, if the vaccine schedule becomes visible, the stock attractiveness of leisure operators whose stock prices have been sluggish will increase."

Researcher Lee also stated, "Even if COVID-19 resurges, additional stock price declines are judged to be limited," and added, "Since the stock price has been sideways due to lack of expectations, there is no expectation to be released even if COVID-19 resurges." Furthermore, Lee maintained a 'Buy' investment opinion and a target price of 30,000 KRW, saying, "If the timeline is set one year ahead, the casino industry, which has highly inelastic demand, still represents an excellent period for stock attractiveness."

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