[Click eStock] May Casino Revenue Halved at Paradise... "Recovery of Jung VIP Demand is Key"

Surviving on Domestic VIP Demand Unable to Travel Abroad
Recovery of High-Spending Chinese VIP Demand Key to Performance Improvement

[Asia Economy Reporter Minwoo Lee] Paradise's casino revenue last month was halved compared to the same month last year. It appears to be enduring the economic downturn caused by the novel coronavirus (COVID-19) by absorbing domestic VIP demand that cannot travel abroad. Experts say that the recovery of Chinese VIP demand is crucial for performance improvement.

On the 4th, Kiwoom Securities maintained a 'Buy' rating and a target price of 24,000 KRW for Paradise. As the situation of performance improvement remains uncertain due to COVID-19, the stock price outlook has remained unchanged since April.

In fact, last month, Paradise's casino revenue was 29.8 billion KRW, down 51.2% compared to the same month last year. This performance was achieved because domestic VIP demand, unable to visit Macau, Singapore, and other locations, concentrated here. Researcher Namsu Lee of Kiwoom Securities explained, "In the case of the Walkerhill branch, the total amount of chips purchased by domestic VIPs to play games in the casino (drop amount) was 77.8 billion KRW, which is 140% higher than the monthly average of 54.1 billion KRW in 2018-2019," adding, "It will continue to play a key role in offsetting the sluggish overseas VIP demand caused by COVID-19."

As the resumption of overseas VIP demand remains uncertain, it is estimated that the second quarter will achieve 87.5 billion KRW, down 62% compared to the same period last year. However, the COVID-19 situation in Greater China, including China and Taiwan, has calmed more than in Japan, and due to Japan's visa suspension measures and intensified conflicts, it is analyzed that demand recovery in Greater China will occur first rather than in Japan.

Researcher Lee predicted, "While the average drop amount per other VIP is 18 million KRW, the average drop amount per Chinese VIP is about 35 million KRW. If Chinese VIPs revisit, casino performance will recover sharply." He added, "Also, as vacation choices are expected to focus more on domestic travel rather than overseas travel, improvement in hotel performance in Yeongjongdo and Busan is anticipated, and the stable contribution of the non-casino sector to overall performance will continue."

This content was produced with the assistance of AI translation services.