[Click eStock] "Lotte Tour, Jeju Dream Tower Casino Performance Up... 50% Higher Target Price"

On the 15th, Eugene Investment & Securities set a target price of 15,000 KRW for Lotte Tour Development, which operates the Jeju Dream Tower complex resort, 50% higher than the current stock price. This is based on the expectation that the pace of performance improvement will accelerate as the number of Chinese casino visitors increases.

Aerial view of Jeju Dream Tower Complex Resort operated by Lotte Tour Development

Analyst Lee Hyun-ji of Eugene Investment & Securities stated, "Since the opening of the Dream Tower complex resort in 2020, Lotte Tour Development has continuously incurred operating losses of around 30 billion KRW per quarter due to fixed cost burdens. However, thanks to the sharp growth of the casino recently, it has shown a clear performance turnaround by turning to operating profit from the first quarter of this year."

The analyst added, "Jeju Island is a popular tourist destination where Chinese nationals can enter visa-free and is located just 2 hours 30 minutes and 1 hour 30 minutes away by direct flights from Beijing and Shanghai, respectively. We conservatively estimate that the annual number of Chinese visitors to Jeju this year will reach 1.52 million." This figure represents a recovery to 67.9% of the peak in 2015 and 49.6% of that in 2016, when Chinese visits were most active.

He predicted, "The rate of increase in Chinese visitors to Jeju casinos will be steeper compared to inland casinos such as Kangwon Land. Lotte Tour Development is expected to be the business entity that benefits the most from the spillover effect of the increase in Chinese visitors." He also expressed optimism, saying, "If the refinancing of 780 billion KRW in development funds scheduled for the end of this year is successful, it will act as a positive factor for profitability improvement by reducing financial costs."

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