[Click e-Stock] "Casino Stocks Have Strong Fundamentals... A Buying Opportunity at Low Prices"

The major three foreigner-only casino operators last month-Paradise, GKL, and Lotte Tour Development-saw mixed performance results. However, an analysis published on March 5, 2026, suggests that the industry as a whole is expected to see improved results in the second quarter, as the off-season comes to an end.

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On March 5, Lim Sujin, a researcher at Kiwoom Securities, commented on the three foreigner-only casino operators, stating, "The favorable business environment, driven by the continued weakness of the won and the positive spillover effect from eased travel restrictions between Korea and Japan, is expected to lead to a sharp recovery in growth starting from the second quarter." Lim also recommended, "Investors should consider the current oversold price range as an opportunity to increase their holdings."

The performance results of the three foreigner-only casino operators last month were clearly divided. Paradise reported net sales of 89.5 billion won, an increase of 24.3% compared to the same period last year. However, this represented a 5% decrease from the previous month. The drop amount (the total amount exchanged for chips for gaming) was 535.6 billion won, which contracted compared to the previous month. However, the hold rate (the proportion of revenue the casino earns from games) was 15.9%, up 1.8 percentage points from the previous month, helping to defend profitability.

In particular, Paradise's mass (general customer) drop amount reached 132.1 billion won, up 19.4% year-on-year, supporting the company's fundamentals. Based on this, Lim raised her first-quarter operating profit estimate for Paradise from the previous 47 billion won to 57 billion won.

GKL also recorded net sales of 38.1 billion won, up 4.0% from the previous month and 17.3% from the same period last year, meeting market expectations for growth. Total drop amount was 285.7 billion won, a decrease of 6.6% from the previous month, but up 9.4% year-on-year. Growth in drop amount was driven by both Chinese VIPs and general mass customers, and the hold rate was 13.3%, up 1.4 percentage points from the previous month and 0.9 percentage points from the same period last year.

In contrast, Lotte Tour Development reported a net sales shock, with net sales decreasing 28.4% from the previous month to 32.6 billion won. The sharp decline in drop amount, which fell 33.9% from the previous month to 172.9 billion won, was the main reason. The drop amount per person also fell to 3.9 million won, down 20.1% from the previous month and 16.4% from the same period last year, indicating worsening qualitative metrics. Lim analyzed that this was due to two independent factors: the Chinese Embassy's advisory against overseas gambling and the postponement of the Triton Poker Tournament to March.

However, the recent share prices of all three casino companies have declined, with a weekly average drop of 16%. Paradise's closing price the previous day was 16,100 won (down 17.94% from the previous week's closing price), GKL closed at 12,250 won (down 10.12%), and Lotte Tour Development finished at 18,990 won (down 20.38%). Lim explained, "The decline in valuations appears to be caused by worsening external conditions, such as heightened geopolitical risks in the Middle East, which are unrelated to company fundamentals."

Each company's positive developments are expected to have a favorable impact on their share prices. Lim noted, "Lotte Tour Development is scheduled to host the Triton Poker Tournament and a VIP baccarat tournament, while Paradise is expected to see an influx of premium mass customers following the opening of the Hyatt Regency."

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