[Asia Economy Reporter Park Jihwan] Shinhan Financial Investment evaluated on the 31st that Paradise is expected to continue operating at a loss until the third quarter of next year, but the deficit is likely to be smaller than previously estimated. Accordingly, they maintained a 'Buy' investment rating and raised the target price by 6.7% to 16,000 KRW.
Seong Junwon, a researcher at Shinhan Financial Investment, stated, "The consolidated operating profit for next year is expected to remain at a loss of -35 billion KRW," adding, "due to the two-week self-quarantine, it will be difficult for Chinese and Japanese VIP customers to enter Korea for casino gaming until the first half of next year." He particularly analyzed that the company will have to sustain itself with sales of about 30% generated by foreigners residing in Korea.
However, from next year, it is explained that fixed costs will be significantly reduced, and gradual quarterly performance improvements are expected. Quarterly consolidated operating profits are estimated to be a loss of 41.8 billion KRW in Q4 this year, a loss of 27.9 billion KRW in Q1 next year, a loss of 16.8 billion KRW in Q2, a loss of 2.5 billion KRW in Q3, and a profit of 12.2 billion KRW in Q4.
Researcher Seong said, "Unlike other government-owned casinos such as Kangwon Land and GKL, Paradise is undergoing restructuring," and added, "The policy to reduce general casino costs along with multifaceted restructuring of the non-casino sector is expected to be completed by the end of this year."
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