[Click eStock] "Kangwon Land, a Beneficiary Stock of With-Corona"

Kangwon Land Holds Monopoly as the Only Domestic Casino with Inelastic Demand
KB Securities Maintains Kangwon Land Target Price at 36,000 Won

[Asia Economy Reporter Gong Byung-sun] The quarantine system focusing on managing critically ill patients rather than suppressing new COVID-19 cases, known as 'With Corona,' is being mentioned daily. If With Corona is implemented, Kangwon Land's performance is expected to recover rapidly.

On the 31st, KB Securities maintained its investment opinion of 'Buy' and target price of 36,000 KRW for Kangwon Land. Despite the spread of the COVID-19 Delta variant, they did not lower their investment opinion or target price. The previous day's closing price was 27,700 KRW.

Globally, there is a trend toward easing quarantine measures. Countries with high vaccination rates such as the UK, Israel, and the US are raising expectations for a return to normal life by shifting their quarantine strategies to With Corona. Israel declared outdoor no-mask first in the world last April, and the UK eased quarantine regulations such as limits on gathering sizes and mandatory indoor mask-wearing starting in July.

With Corona is also being discussed in Korea. Experts and society still consider no-mask premature. However, observing the trends in countries leading With Corona, experts agree that preparations should be made to gradually ease mask-wearing regulations.

(Provided by KB Securities)

If With Corona is implemented in Korea, the industry expected to recover performance the fastest is domestic casinos. Considering that demand does not change significantly and Kangwon Land's monopoly status as the only domestic casino, operating profit is expected to show a stepwise increase each quarter. In fact, Kangwon Land recorded an earnings surprise with an operating profit of 2.7 billion KRW in Q2 this year by applying eased standards under the newly established Level 1 social distancing.

Currently, although the COVID-19 Delta variant is spreading, eased standards are still being applied. The simultaneous occupancy limit is 1,800 people, which is more relaxed than Q2's 1,200 people. KB Securities researcher Lee Sun-hwa said, “If the COVID-19 vaccination rate rises and social distancing regulations are eased in the future, Kangwon Land's performance will improve,” adding, “Kangwon Land's operating profit is expected to be 16.5 billion KRW and 17.6 billion KRW in Q3 and Q4 this year, respectively.”