Hanwha Investment & Securities projected on the 3rd that the positive performance trend of Paradise will continue into the second half of the year. The investment opinion is 'buy' with a target price of 26,000 won. Paradise's closing price the previous day was 19,470 won.
Paradise recorded a combined net sales of 80.5 billion won and a drop amount of 656.3 billion won from all its business sites in August this year. Although the drop amount decreased by 1.7% compared to the previous year, the number of VIP visits increased by 9.6% to 16,879.
Researcher Park Soo-young of Hanwha Investment & Securities said, 'The friend referral event targeting VVIP guests is interpreted as having synergetic effects with the Obong Festival.' Additionally, he explained that the steady increase in the mass drop amount (casino revenue) at the Paradise City business site is also noteworthy.
In June, the drop amount from Chinese VIPs at the Walkerhill business site significantly increased to 56.9 billion won, which is interpreted as a result of an event conducted for Chinese VIPs at that time.
Researcher Park noted, 'A similar event is scheduled for October at the Paradise City business site targeting Chinese VIPs,' and added, 'The scale of the event is expected to be larger than in June, and considering the National Day, expectations for the drop amount and number of visits from Chinese VIPs at Paradise City in October are rising.'
Meanwhile, Hanwha Investment & Securities believes that Paradise continues to push for the acquisition of the Hyatt West Tower in Incheon. Researcher Park analyzed, 'If the 500 additional rooms of the Hyatt West Tower are added, a capacity expansion of over 70% is expected,' and added, 'Acquiring the Hyatt will allow Paradise City to fully utilize it as a comp (compensation provided to casino customers) for casino VIP clients, which may attract growth in the drop amount at the casino establishment.'
He added, 'There are no significant expense execution issues expected in the third quarter,' and noted, 'In the case of the third quarter, the casino flow was not bad until August, and the fourth quarter is expected to see sustained strong performance due to the October National Day and VIP events.'