[Click eStock] "Kangwon Land, Casino Recovers to Pre-COVID Levels... Now the Beginning"
![[Click eStock] "Kangwon Land, Casino Recovers to Pre-COVID Levels... Now the Beginning"](http://www.asiae.co.kr/news/img_view.htm?img=2019040414282241888_1554355702.jpg)
[Asia Economy Reporter Kwon Jae-hee] NH Investment & Securities maintained its 'Buy' rating and target price of 33,000 KRW for Kangwon Land on the 13th.
Kangwon Land's Q4 performance is expected to meet consensus with consolidated sales of 370.5 billion KRW and operating profit of 64.7 billion KRW. Although there is a seasonal cost burden due to incentives, strong sales are anticipated in both casino and non-casino sectors.
In the casino sector, visitor growth is slower than expected due to demand dispersion following the recent resumption of overseas travel; however, since sales have already recovered to pre-COVID-19 levels, further growth is only a matter of time. Additionally, strong performance is expected from seasonal benefits such as expanded ski resort season pass sales in the non-casino sector.
In the mid to long term, attention should be paid to the momentum from future expansion of the operating area. This not only improves the short-term operating environment but also secures the capacity to immediately increase table utilization rates if the total sales volume system is relaxed in the mid to long term. Currently, the total sales volume of the gambling industry is 0.51% of nominal GDP, and casino sales volume accounts for 14-15% (1.6 trillion KRW) of the total sales volume. With increasing demands for sales volume expansion recently, it is worth watching the direction when the five-year plan is established by the end of next year.
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Researcher Lee Hwajeong of NH Investment & Securities analyzed, "With the complete lifting of social distancing in the second half of the year, the operating environment has fully normalized, and casino sales have recovered to pre-COVID-19 levels," adding, "Due to the recovery of operating hours and high-stakes betting tables, drop amounts are expected to exceed pre-COVID-19 levels, so expectations for sales growth remain valid."
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