[Click e-Stock] Kangwon Land: Overall Business Conditions Improve, Target Price Raised

On July 30, NH Investment & Securities raised its target price for Kangwon Land to 23,000 won, highlighting the company's growth potential driven by improved business conditions and its appeal in terms of shareholder returns.

Lee Hwajeong, an analyst at NH Investment & Securities, stated, "Renovations of the gaming facilities are being carried out sequentially, and overall business conditions are improving, such as the increase in table betting limits. With plans to expand the number of tables to 50 and slot machines to 250 by 2028, mid- to long-term earnings growth is also secured."

She added, "The annual shareholder return target is set at 60%, which will be achieved through dividends and share buybacks. Currently, Kangwon Land's treasury shares account for 6.33%. If the mandatory share cancellation bill is confirmed, the company will comply with the guidelines."

The target price was raised by 5% from the previous 22,000 won to 23,000 won. Lee explained, "Although we slightly lowered our earnings estimates to reflect the increase in performance-based bonuses due to the improved management evaluation, we raised the target PER to 16 times (from the previous 15 times) considering the overall re-rating of global casino operators."

Meanwhile, Kangwon Land's earnings for the second quarter of this year recorded an earnings shock due to the increase in performance-based bonuses following the management evaluation. On a separate quarter basis, revenue for the second quarter was 360.7 billion won, up 7% year-on-year, but operating profit decreased by 21% to 57.9 billion won over the same period.