DAOL Investment & Securities noted on the 28th that the no-visa policy for Chinese group tourists is expected to drive growth in casino and hotel revenues for Paradise. The target stock price has been raised from the previous 18,000 won to 25,000 won, and the investment opinion remains 'buy'.
For the first half of the year, Paradise's casino revenue was 443.8 billion won, accounting for about 79% of total revenue, while hotel revenue was 115.3 billion won, making up the remaining approximately 20%. The relatively lower hotel revenue compared to casino revenue is due to the free rooms provided to casino customers. If the number of pure guests increases, hotel revenue could also see significant growth.
However, increasing casino revenue is key compared to hotel revenue. Currently, they are collaborating with local Chinese travel agencies to develop joint products. With plans to prepare incentives and channels for group tourists, growth in casino revenue is also anticipated.
Recently, a plan to acquire the West Tower building of the Grand Hyatt Incheon near Paradise City on Yeongjong Island is also under consideration. If the acquisition goes through, it will enable room acquisition and business expansion, likely becoming another driver of revenue growth.
Kim Hye-young, a researcher at DAOL Investment & Securities, explained, "Considering the no-visa policy and growth strategy, we have raised our performance expectations from the fourth quarter of this year to next year."