[Click eStock] "Modetour to Benefit from China's Visa-Free Policy in 2025... Target Price Up"

Hana Securities on the 19th raised the target price for Modetour, which recently posted sluggish performance, to 13,500 KRW, maintaining a 'Buy' investment rating, citing direct benefits from the Chinese visa-free policy.

Researcher Lee Ki-hoon stated, "With the sudden implementation of the Chinese visa-free policy, demand for sending customers to China is expected to recover rapidly from the first quarter of next year," adding, "We expect to restore operating profit strength to around 20 billion KRW annually and have raised the target price by 8% considering the upward revision of 2025 earnings."

Lee also noted, "Assuming that Chinese visa-free entry is possible (temporarily until the end of next year) and that the number of Chinese package tourists grows back to 2016 levels (approximately 350,000 annually), there is potential for an additional annual increase of about 100,000 tourists."

He added, "Based on this, the projected annual revenue and operating profit for 2025 are 300 billion KRW and 19.3 billion KRW respectively, representing increases of 17% and 200% compared to the previous year," further stating, "Excluding a one-time labor cost of about 8 billion KRW in 2023, operating profit is around 19 billion KRW, indicating ample room for upward revision of our forecast."

He further explained, "Shanghai and Qingdao in China are about 1.5 to 2 hours away by flight and are popular destinations for golf packages, with a sharp recovery in demand expected to be confirmed from the end of the first quarter next year."

Meanwhile, Modetour recorded sales and operating profit of 65.2 billion KRW and 1.6 billion KRW respectively in the third quarter of this year, up 21% and down 46% year-on-year. This fell short of the market consensus of 3 billion KRW. Due to the Nankai earthquake warning and other factors, demand for Japan has shrunk, causing both the standalone business and Modetour Japan to turn to losses.

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