[Click eStock] "Kangwon Land, Daily Visitors Expected to Increase with 'With Corona'"

KB Securities Report

[Asia Economy Reporter Minji Lee] KB Securities on the 7th issued a forecast that Gangwon Land is expected to experience stable profit growth due to an increase in average daily visitors following the application of relaxed social distancing quarantine rules. The investment opinion was maintained as Buy, and the target price was kept at 36,000 KRW.

Gangwon Land's consolidated sales for the third quarter are expected to reach 242.1 billion KRW, with an operating profit of 26.5 billion KRW, representing a 216% increase and a turnaround to profitability compared to the same period last year. The average daily traffic in the third quarter is estimated to be around 2,700 people, which is about a 25% increase from approximately 2,150 people in the second quarter.

Researcher Seonhwa Lee of KB Securities stated, “Although the social distancing quarantine level in Jeongseon-gun, Gangwon Province was strengthened due to the spread of the COVID-19 Delta variant and operations were suspended for two business days, the application of the revised social distancing quarantine rules, which relaxed the limit on simultaneous occupancy, is the reason behind the strong performance.”

According to recent statements by Kwon Deok-cheol, Minister of Health and Welfare, the transition to a phased daily recovery system is expected in early November. Once the vaccine pass is introduced, Gangwon Land, which currently manages entry through a reservation system, is likely to exclude those with vaccine passes from social distancing restrictions. Since Gangwon Land’s main customer base consists of men in their 40s to 60s, who have a high vaccination rate according to customer profiles, a rapid recovery in traffic is expected if the vaccine pass is implemented.

Researcher Seonhwa Lee analyzed, “A turnaround to net profit is expected for the full year, and as expectations for dividend resumption spread toward the end of the year, its attractiveness as a dividend stock is predicted to become more prominent.”