[Click e-Stock] "Paradise to Attract Both Japanese and Chinese Customers"

Strong Q2 Results... Expansion of Visa-Free Entry for Chinese Tourists a Positive Factor
Japanese Holidays Also Expected to Boost Second-Half Performance

Paradise is expected to continue its strong performance in the second half of the year. This outlook is supported by the nationwide expansion of visa-free entry for Chinese group tourists, as well as anticipated demand during Japanese holidays.

On August 8, KB Securities raised its target price for Paradise by 7.7% to 28,000 won and maintained its 'Buy' rating. The previous day's closing price was 19,500 won.

First and foremost, the expansion of visa-free entry for Chinese group tourists is considered the most significant positive factor. The government has decided to temporarily expand visa-free entry for Chinese group tourists nationwide from September 29 until June 30 of next year. The regions expected to benefit the most from this policy are Incheon and the greater Seoul area. Paradise, in particular, owns Paradise City, which is located just 10 minutes from Incheon Airport.

The company also delivered solid results in the second quarter. On a consolidated basis, sales reached 284.5 billion won and operating profit was 42.9 billion won, up 4.1% and 33.9% year-on-year, respectively. Operating profit also far exceeded the market consensus of 37.1 billion won. The drop amount (the total amount customers spent on gaming) at Paradise City Incheon increased by 19.5% year-on-year, and the hold rate (the percentage of money the casino retained from games) rose by 0.5 percentage points, driving top-line growth. Casino sales reached a record-high quarterly figure of 229.8 billion won.

With the drop amount in July rising 0.4% from the previous month, the upcoming Obon holiday in Japan this month and the peak season during China's National Day holiday in October are also expected to positively impact second-half results. The company is preparing aggressive marketing campaigns targeting Chinese customers, who will benefit from expanded visa-free entry starting September 29. Paradise is developing package products with inbound travel agencies, offering interpretation services for Chinese guests, and utilizing WeChat for marketing.

Lee Sunhwa, a researcher at KB Securities, explained, "It has been reported that Paradise City is considering acquiring the West Tower building of the Grand Hyatt Incheon across the street. If this is possible, the company could immediately increase capacity without the time required for hotel expansion."