[Click eStock] "Hanilryeong Policy Benefits... Lotte Tour Development Target Price Up, Paradise Down"

On November 27, Daol Investment & Securities stated that the benefits from the Hanilryeong policy in China will be concentrated in the hotel sector, and that Lotte Tour Development, which has a strong independent casino operation capability, is expected to be the primary beneficiary. Accordingly, the firm selected Lotte Tour Development as its top pick in the sector and raised its target price from 19,000 won to 29,000 won. In contrast, the target price for Paradise was lowered from 25,000 won to 23,000 won.

Kim Hyeyoung, a researcher at Daol Investment & Securities, said, "Lotte Tour Development has settled onto a growth trajectory, and we are revising up our casino performance estimates." She forecast, "In 2026, revenue will reach 783.3 billion won (up 22.9% year-on-year), and operating profit will be 240.4 billion won (up 74.0%)." The 2026 casino revenue is estimated at 595.7 billion won, with a drop amount of 3.5522 trillion won and a hold rate of 17% applied.

In particular, the potential expansion of direct flight routes from China due to the Hanilryeong environment is expected to be a key factor for performance improvement. Currently, Jeju Airport operates about 15 direct routes, but in 2016, there were as many as 30, indicating ample room for recovery. She explained, "Since Dream Tower Integrated Resort provides hotel accommodations free of charge to casino customers, standalone sales will increase, but consolidated sales are expected to decrease. It is necessary to view this from an infrastructure perspective for the casino."

Within the leisure sector, the benefits of the visa-free policy and the Hanilryeong policy are expected to continue. However, Kim emphasized, "The benefits of the visa-free policy and the Hanilryeong policy will be concentrated in the hotel sector, so the independent operational capability of the casino is crucial." She added, "Geographical proximity, tourism elements, membership benefits, and competitive advantages such as visa-free access must come first. In this respect, the growth of Lotte Tour Development has been remarkable and is expected to continue in 2026."

This content was produced with the assistance of AI translation services.