[Click eStock] "Kangwon Land, Rising Earnings Expectations"

Hana Financial Investment Report

[Asia Economy Reporter Minji Lee] Hana Financial Investment on the 1st forecasted that Kangwon Land will show a steep recovery considering the rapid increase in the number of visitors.

Sales and operating profit in the second quarter are estimated to increase by 51% and 2522% year-on-year to 308.4 billion KRW and 70.8 billion KRW, respectively. Operating profit is expected to significantly exceed the market consensus of 63.4 billion KRW.

This is due to the restoration of operating hours to 20 hours from April 18 and the relaxation of side betting regulations from the 16th of last month. Accordingly, the daily number of visitors is expected to sharply rise from around 4,200 in April to about 6,200 in June, expanding to approximately 500,000 visitors per quarter.

Researcher Kihoon Lee of Hana Financial Investment said, "As of the end of last month, the number of visitors is estimated to reach 90% of the 2019 level," adding, "Considering the increase in operating hours and the number of tables, drop and sales are recovering at an even faster pace."

Hotels and resorts showed somewhat weaker performance compared to the first quarter due to seasonal off-peak periods, but looking at June when all regulations were relaxed, they are estimated to have shown a recovery close to the 2019 level. Non-operating financial income is expected to be significantly reduced compared to an average quarter.

The expected operating profit for the third quarter is estimated to recover to 115.7 billion KRW, about 83% of the 2019 level. This is because operating hours increased from 18 to 20 hours and the number of tables rose from 180 to 200 compared to 2019.

Researcher Lee said, "If the quarterly number of visitors approaches 600,000 during the peak season, it is a feasible level," and analyzed, "An operating profit of 500 billion KRW in 2023 is also fully expected."