Visitor Surge and "Korean Wave Ban" Easing Fuel Expectations of Sharp Sales Growth for Lotte Tour Development [Market Focus]

As of 9:30 a.m. on December 3, the share price of Lotte Tour Development was up 9.07% from the previous day’s closing, trading at 22,850 won on the Korea Exchange. This surge appears to be driven by expectations that the company will benefit from the Chinese government’s easing of the “Korean Wave Ban” amid a sharp increase in monthly sales.

On this day, DS Investment & Securities analyzed that all indicators for November 2024 showed growth compared to the same month last year. Monthly visitors reached 50,620, up 41.3%, and total drop amount (the amount casino customers exchanged for chips) soared 75.4% to 262.8 billion won. Casino revenue continued its robust growth, reaching 51.4 billion won, a 96.9% year-on-year increase.

DS Investment & Securities estimated that, thanks to strong casino performance, Lotte Tour Development would record sales of 191.3 billion won and operating profit of 55.7 billion won in the fourth quarter. These figures represent increases of 73.9% and 2,480.1%, respectively, compared to the same period last year.

Kiwoom Securities also projected that Lotte Tour Development’s fourth-quarter sales would reach 189.3 billion won, with operating profit of 48 billion won. This is expected to significantly exceed the market consensus for operating profit, which stands at 38.5 billion won.

Kim Jinhyung, analyst at DS Investment & Securities, stated, “As both monthly and daily seasonality is diminishing, we can expect continued growth in casino revenue even in the fourth quarter, which is typically a relatively slow season compared to the third quarter.” He added, “With the addition of new international flights such as to Harbin, the number of casino visitors is expected to steadily increase for the time being. Furthermore, we can anticipate an expansion of air routes to Jeju International Airport as a result of the easing of the Korean Wave Ban.”

Lotte Tour Development Jeju Dream Tower Complex Resort