SK Securities on the 22nd said Lotte Tour Development's results are clearly growing and that the Jeju Dream Tower hotel and casino, which opened during the COVID-19 pandemic, have found their footing. It maintained a "buy" investment rating and raised the target price 24% to 31,000 won from 25,000 won. Lotte Tour Development's previous closing price was 19,740 won.
Na Seung-du, an analyst at SK Securities, said there is "clear earnings growth," noting that "as the Jeju Dream Tower hotel and casino, which opened during the COVID-19 pandemic, have settled in, they have wiped away investors' concerns."
Earlier, Lotte Tour Development succeeded in turning to an annual net profit last year. The monthly performance trend announced this year is described as encouraging. From January to March this year, foreign arrivals to Jeju rose 29.1% from a year earlier, and sales at the Jeju Dream Tower hotel also increased 27.9% year over year. In addition, casino sales jumped 40.3% from a year earlier.
Na said, "It could be interpreted as a temporary effect from the hold rate (the percentage of money the casino retains by winning games), but considering that drop (the amount customers exchanged for chips to play) during the same period also increased 36.7% year over year, it is more accurate to judge that the Jeju Dream Tower casino has now fully settled and entered a clear growth phase," adding, "It is also positive that, based on confidence in results, more aggressive marketing has become possible."
It was also viewed positively that Jeju is actively moving to expand its international air routes. Early this year, Jeju announced that, to attract tourists and revitalize the local economy, it would partially compensate shortfalls in fare revenue for new international routes and additional flights. As a result, foreign airlines can also benefit from the program, increasing the appeal of direct flights to Jeju.
Na said, "Basically, an increase in Chinese tourists due to expanded exchanges such as the visa-free policy between Korea and China is expected to stand out, but visits by travelers from Japan and Southeast Asia are also projected to continue steadily," adding, "In particular, due to the inability to take long-haul trips because of the Middle East war, a preference for safe destinations, and growing interest in Korean culture, interest in Korea and Jeju is rising, and an increase in foreign arrivals to Jeju and casino visitors is expected."