[Click eStock] "Lotte Tour Development, Profit Turnaround in Sight... Target Price Maintained"

Yuanta Securities stated on the 24th that "With the recovery of foreign visitors to Jeju Island this year, significant annual growth is expected to continue. The point at which operating profit turns positive is becoming visible," maintaining a buy rating and a target price of 16,000 KRW for Lotte Tour Development. The closing price on the previous day was 9,430 KRW.

Jeju Dream Tower Complex Resort
Photo by Lotte Tour Development

On the same day, researcher Hwanwook Lee of Yuanta Securities said, "First-quarter sales are expected to reach 105.5 billion KRW, a 123.9% increase compared to the same period last year, and operating profit is expected to turn positive at 6.5 billion KRW, achieving the highest quarterly performance."

By business division, sales from the 'Dream Tower Complex Resort Hotel' are expected to reach 19.8 billion KRW, a 5.2% increase compared to the same period last year. Although the number of domestic visitors decreased by 40.0% compared to the same period last year, the number of foreign visitors improved significantly by 463% year-on-year. The first-quarter average daily rate (ADR) is expected to be around 256,000 KRW, down from the same period last year, but thanks to the increased proportion of foreign guests, the average occupancy rate (OCC) is expected to rise to 50.3%.

Casino sales are expected to reach 70 billion KRW, a 327.9% increase compared to the same period last year. The number of visitors increased by 142.4% year-on-year to 79,253, contributing to the growth in performance. However, the recovery in the number of visitors is somewhat slower compared to the recovery of foreign visitors to Jeju Island.

Researcher Lee said, "This year's sales are expected to increase by 48.9% to 466.7 billion KRW compared to last year, and operating profit is expected to turn positive at 39.8 billion KRW." The estimate is based on the increase in foreign visitors to Jeju City. The number of foreign visitors this year is expected to reach 1,646,931, a 132.2% increase compared to last year. The recovery rate compared to 2019 is about 97%, with normalization as the goal.