[Click eStock] "Lotte Tour Development Awaits With Corona"

Casino Visitors Decline in September Due to COVID-19 Delta Variant Spread
KB Securities Maintains Lotte Tour Development Target Price at 28,000 Won

[Asia Economy Reporter Gong Byung-sun] As the COVID-19 Delta variant spreads, Lotte Tour Development's third-quarter performance this year is expected to fall somewhat short of expectations. However, anticipation is growing for "With Corona," which signifies a phased return to normal life, including the travel bubble agreement with Singapore.

On the 15th, KB Securities estimated Lotte Tour Development's third-quarter sales this year at 40.3 billion KRW, a 3200% increase compared to the same period last year, and an operating loss of 14.1 billion KRW, continuing a deficit for the same period. This is 12% and 4.4% below the consensus estimates of 46 billion KRW in sales and 13.5 billion KRW in operating loss, respectively.

Due to the COVID-19 Delta variant, third-quarter performance is expected to be sluggish. Jeju Island's social distancing was maintained at level 4 from August 15 to September 19 and level 3 from September 20 to the present, resulting in Tower 2 hotel rooms remaining closed. Additionally, casino visitors decreased. The average daily number of casino visitors, which was around 300 in July and August, appears to have dropped to about 200 even during the Chuseok holiday in September.

However, sales related to the reopening of economic activities are expected to increase from November. Sales from Tower 2 room reservations postponed to November are estimated at 15.3 billion KRW. Retail sales generated by resort guests purchasing swimwear and other items are expected to be 3 billion KRW, and travel sales including Saipan tourism products are anticipated to be 1 billion KRW.

Lee Seon-hwa, a KB Securities researcher, explained, "With the travel bubble agreement with Saipan, travel sales will increase, and retail sales will also rise as resort travelers' consumption grows," adding, "Operating expenses are expected to be similar to those in the second quarter of this year."

Accordingly, KB Securities maintained its investment opinion of "Buy" and a target stock price of 28,000 KRW for Lotte Tour Development. The closing price on the previous day was 20,900 KRW.

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