[Click e-Stock] "Lotte Tour Development, Foreign Demand Set to Expand Significantly... Target Price Raised"

On April 22, SK Securities stated that Lotte Tour Development is becoming increasingly attractive for investment as its casino performance rapidly improves alongside a rise in foreign tourists. Accordingly, the target price was raised by 24%, from 25,000 won to 31,000 won.

Na Seungdoo, a researcher at SK Securities, commented, "This is truly a period of remarkable earnings growth," and added, "The Jeju Dream Tower hotel and casino, which opened during the COVID-19 pandemic, have now become firmly established, dispelling investors' concerns."

In fact, Lotte Tour Development successfully achieved a turnaround to annual net profit for 2025, demonstrating structural improvement. Notably, the monthly performance trend this year shows clear growth. From January to March, the number of foreign visitors to Jeju increased by 29.1% compared to the same period last year; accordingly, Jeju Dream Tower hotel revenue rose by 27.9% year-on-year, and casino revenue jumped by 40.3% year-on-year.

Researcher Na analyzed, "Some may interpret this as a temporary effect due to the hold rate, but considering that the drop amount also increased by 36.7% year-on-year during the same period, it is more accurate to judge that the Jeju Dream Tower casino has now been fully established and entered a clear growth phase." He added, "Another positive factor is that the company is now able to pursue more aggressive marketing based on its confidence in performance."

The external environment surrounding Jeju is also changing positively. Na pointed out, "The active expansion of Jeju's international airline routes is very encouraging," explaining, "With policies in place to partially compensate for revenue shortfalls on new and expanded international routes, the appeal of direct flights to Jeju has increased."

In particular, expectations are rising for an increase in Chinese tourists due to expanded exchanges such as the Korea-China visa-free policy, while the steady inflow of tourists from Japan and Southeast Asia is also expected to continue. In addition, as demand for long-haul travel declines due to geopolitical risks in the Middle East, Jeju, seen as a relatively safe destination, is becoming increasingly favored among travelers.

Researcher Na explained, "We changed the 2025 EBITDA used in the previous target price calculation to the expected 2026 EBITDA, and applied an EV/EBITDA multiple of 9 times, which is a 35% discount compared to the historical average since 2023." He emphasized, "This means the current share price is undervalued compared to the period when Dream Tower received its highest evaluation after opening."

He also added, "Given that the average EV/EBITDA multiples of global casino operators with major hubs in Macau, Singapore, and Hong Kong are in the mid-to-high teens, Lotte Tour Development's stock price remains in an attractive range."

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