[Click e Stocks] Golf Specialist KMH, Business Diversification Including Sky72 Draws Attention

[Asia Economy Reporter Junho Hwang] NH Investment & Securities highlighted the diversification of golf business by KMH, a KOSDAQ-listed company, through the sale of Tejeve CC and the entrusted operation of Sky72 in its stock report on the 9th.

KMH owns three public golf courses near the metropolitan area: Tejeve CC (36 holes), Shilla CC (27 holes), and Paju CC (18 holes). Last year, the total revenue from golf courses was 86.1 billion KRW, a 21.1% increase compared to the previous year. In the first quarter of this year, revenue was 12.8 billion KRW, up 29.7% year-on-year. Operating profit also surged by 297% to 2.6 billion KRW.

NH Investment & Securities analyzed that although KMH raised green fees by 30,000 to 40,000 KRW in the first quarter, the advantage of being located in the metropolitan area and the expansion of the golf base have steadily increased the number of golf course visitors. The domestic golf population continues to grow, so there is a possibility of green fee increases next year as well.

Additionally, NH Investment & Securities forecasted that if KMH starts operating Sky72, considering last year's performance and taking a conservative view, it could achieve revenue of 80 billion KRW and operating profit of 12 billion KRW. KMH was selected as the entrusted operator of Sky72 at the end of last year, but due to internal issues at Sky72, the entrusted operation has not yet commenced. In the case of Tejeve CC, it recorded an annual loss of 3.3 billion KRW in 2017 but made a profit of 9.2 billion KRW in 2019 after KMH's acquisition.

Sehun Son, a researcher at NH Investment & Securities, said, "KMH plans to sell Tejeve CC for about 220 billion KRW and has selected Ebest Securities as the preferred negotiator," adding, "It is seeking business diversification in the golf sector, including participating in the acquisition battle for the golf equipment company Majesty."