[Click e-Stock] "Lotte Tour Development Begins to Reap Sharp Benefits from Improved Korea-China Relations"

On June 19, Hana Securities set a target price of 19,000 won for Lotte Tour Development, anticipating a sharp increase in visitor numbers and earnings growth due to improved Korea-China relations. The investment opinion was set to 'Buy'.

Lee Kihun of Hana Securities stated, "Although the growth rate of Lotte Tour Development had previously fallen short of expectations, the recent improvement in Korea-China relations and performance improvement linked to visitor numbers have led to monthly casino revenue, which is a key metric, exceeding the 40 billion won range." He explained, "This suggests a growth rate that could enable a turnaround to net profit based on 2026 earnings."

Previously, due to the Chinese government's anti-corruption policies and strengthened regulations, the VIP revenue share in the Macau casino industry dropped from 75% in 2016 to 20-25% last year. In response, Lotte Tour Development has focused on expanding its integrated resort and increasing non-casino and general customer revenue in line with government policy. Lee emphasized, "The competitiveness of an integrated resort lies in the number of rooms (you have to be able to stay to enjoy)," adding, "The total number of hotel rooms in Macau increased by 31% compared to 2015, and as of 2024, the average number of hotel rooms is around 2,000."

The recent upward trend in casino visitor numbers is also a positive factor. Lee noted, "With combined casino revenue for April and May reaching 74 billion won, we have raised our second-quarter operating profit forecast by 43% to 29.9 billion won (market consensus: 20.7 billion won)." He projected that in 2025, revenue and operating profit would reach 592.1 billion won (+26% year-on-year) and 96 billion won (+146%), respectively.