[Click eStock] "Lotte Gwangwang Gaebal, Opening Jeju-do Sky Route... Focus on Growth Potential"

[Asia Economy Reporter Jang Hyowon] SK Securities analyzed on the 31st that Lotte Tour Development could emerge as a casino hub in Asia as Jeju Island's air routes are opening, maintaining a target stock price of 25,000 KRW.

Na Seungdoo, a researcher at SK Securities, stated in a report on the same day, "The stock price of Lotte Tour Development has fallen sharply over the past month, mainly due to the resurgence of COVID-19 variants, China's lockdown policies, and political uncertainties."

Nevertheless, Researcher Na said he would maintain the target price as before. The first reason is the resumption of international flights at Jeju Airport, which allows direct access to Jeju Island.

He explained, "In particular, in November, Lotte Tour Development is expected to focus on resuming charter flights for casino VIPs and international routes such as Japan at Jeju Airport, marking a significant turnaround quarter. The increase in foreign visitors to Jeju Island is expected to directly lead to increased sales at the foreigner-only casino in Jeju Dream Tower operated by Lotte Tour Development, higher hotel OCC reservation rates, and increased sales in hotel ancillary facilities such as F&B."

He also suggested the possibility of Jeju Island rising as a casino hub in Asia. He said, "The COVID-19 pandemic and Macau casino market regulations are significant events that have changed the landscape of the casino industry in the Asian region. Although Macau junket operations have been reduced due to China's regulations on Macau casinos, Jeju Island is newly emerging, centered on VIP customers from Japan and Southeast Asia."

He continued, "So far, the slow recovery of Jeju Island's overseas routes has been an obstacle, but starting in November, the resumption of Lotte Tour Development's casino VIP charter flights and direct overseas routes is expected to reveal Jeju Island's true value as an Asian casino hub. In particular, since we have already confirmed a rapid rebound in the performance of surrounding casino companies centered on Incheon Airport due to the expansion of overseas routes, the increase in the number of international flights to Jeju is judged to be a period that absolutely affects performance," he added.

Furthermore, he analyzed, "The number of domestic visitors to Jeju Island this year is expected to exceed the 13.5 million level of 2019, which serves as a fundamental strength to steadily maintain growth in hotel OCC and F&B sales. Also, after the asset revaluation (land) in June, the price-to-book ratio (PBR) based on the current stock price has fallen to 1.9 times, and considering potential buildings that have not been revalued, the PBR is judged to be at a historically low level, making it a very good time to prepare for a rebound."

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