Eugene Securities forecasted on the 24th that Lotte Tour Development is expected to achieve strong performance in the third quarter (July to September). It raised its target stock price from the previous 15,000 won to 23,000 won, a 53% increase, and maintained its investment opinion of 'buy'. The closing price of Lotte Tour Development the previous day was 17,280 won.
Eugene Securities estimated that Lotte Tour Development would record a revenue of 158.1 billion won and an operating profit of 27.8 billion won in the second quarter (April to June) of this year. This represents an increase of 36.2% and 372%, respectively, compared to the same period last year.
Lee Hyun-ji, a researcher at Eugene Securities, said, "The number of casino visitors in the second quarter is estimated to be 150,000, reflecting a 71% increase compared to the same period last year," adding, "The drop amount (the cost of chips purchased by casino visitors) is also expected to rise by 63% from the same period last year to 668.5 billion won, marking the highest performance ever."
Lotte Tour Development has seen a consistent increase in visitors since January. Notably, in May, it recorded over 50,000 visitors for the first time, and despite having one fewer business day and no holidays in June, the number of visitors still increased compared to May, which was viewed positively.
This researcher noted, "The hotel occupancy rate (OCC) in the second quarter has risen to levels similar to that of Macau, proving strong demand," and added, "Continued strong performance is expected even during the peak season in the third quarter."
In particular, the encouraging increase in Chinese visitors is expected to drive performance, as the majority of casino visitors are group tourists from China. Recently, new routes in the Greater China region have been expanded, and it is reported that visa-free entry for Chinese tourists is expected to be allowed.
Meanwhile, considering the remaining convertible bonds (CB), this researcher believes there is potential for stock price increase. He suggested, "Convertible bonds continue to convert with the rise in stock prices, but even if all remaining amounts are converted, there is still over a 30% increase potential based on the current stock price." He maintained Lotte Tour Development as his top pick in the leisure sector.