[Click e-Stock] "Lotte Tour Development to Directly Benefit from Chinese Group Visa Waiver... Target Price Up"

On August 12, Hanwha Investment & Securities analyzed that Lotte Tour Development is expected to be a direct beneficiary of the temporary expansion of visa-free entry for Chinese group tourists. Accordingly, the target price was raised to 28,000 KRW.

Park Sooyoung, a researcher at Hanwha Investment & Securities, stated, "The expansion of visa-free entry for Chinese tourists is expected to benefit the company as well," and predicted, "This visa waiver policy will sharply boost demand from Chinese visitors to Jeju Island."

Park further explained, "The activation of package tour products connecting major mainland cities such as Seoul-Jeju and Busan-Jeju with Jeju Island is anticipated. Until now, group tourists have found it difficult to visit both Seoul and Jeju on a single itinerary due to visa issues, but with affordable domestic flights, this could become an opportunity for them to visit both regions." He added, "Rather than worrying about a decrease in visitors to Jeju Island, it is more appropriate to expect that travel to Korea will establish itself as a travel trend within China."

The outlook for the casino segment is also positive. The 'win per unit per day (WPUPD)' at Dream Tower Casino is around 5.6 million KRW per table, which is lower than major casinos in Macau, but rapid sales growth is considered possible through future expansion of both rooms and tables.

Park stated, "If Dream Tower utilizes 60-65% of its 1,600 rooms for the casino and gradually increases the number of tables, both demand and supply will expand simultaneously, and annual sales growth can be expected."

He also noted, "The visa-free expansion policy for Chinese group tourists does not mean that the benefits will shift to casino operators with venues in the Seoul metropolitan area. Rather, it could further boost the already solid casino performance of the company." He continued, "Currently, Lotte Tour Development's market capitalization is about 1.4 trillion KRW, and based on projected annual earnings for August and next year, reaching 2.4 trillion KRW should be achievable."