[Click eStock] "Golfzon, Reopening Concerns Are Unfounded... Top Leisure Favorite Stock"

[Asia Economy Reporter Ji Yeon-jin] Meritz Securities announced on the 30th that it expects minimal reopening damage to Golfzon as screen golf has settled as a weekday leisure activity, unlike golf courses, and maintains it as the top preferred stock in the leisure industry.

Researcher Lee Hyo-jin of Meritz Securities said, "Golfzon's stock price is going through a pause due to fears related to reopening," adding, "Unlike

many leisure operators whose structural decline stories, hidden by COVID-19, are being confirmed, this company is turning concerns into relief with higher-than-expected growth."

Golfzon's consolidated operating profit for the first quarter of this year is expected to reach a record high of 40 billion KRW, a 40% increase compared to the same period last year. During this period, sales are projected to exceed market expectations with a 44.7% increase to 143.8 billion KRW. Although sales growth in China is expected to slow somewhat in the first quarter due to lockdowns caused by the Olympics and the spread of Omicron, the second quarter is forecasted to surge 83% to 29.6 billion KRW compared to the same period last year (16.1 billion KRW).

The researcher said, "The main reason for expecting Golfzon's high operating profit in the first quarter is domestic performance," adding, "New store openings are expected to reach around 100, the highest ever, and strong new demand will overshadow seasonality, continuously breaking records for the number of rounds played."

Shinyoung Securities raised its consolidated sales estimate for Golfzon this year from 480.9 billion KRW to 550.8 billion KRW. However, since the budget for promotional new businesses to solidify the number one position has doubled compared to last year, the operating profit estimate was maintained.