[Click eStock] "Kangwon Land, Earnings Shock Due to Labor Costs... Growth Potential Remains"

On January 29, NH Investment & Securities analyzed that Kangwon Land's fourth-quarter results fell short of expectations due to higher-than-expected labor costs, including severance pay, as well as other operating expenses.

Kangwon Land's consolidated sales for the fourth quarter of last year were 365.4 billion won, up 6% year-on-year, but operating profit decreased by 31% to 29.7 billion won.

Lee Hwajeong, a researcher at NH Investment & Securities, stated, "Renovation work across the entire business site will continue through 2027, making operational disruptions inevitable." However, she emphasized, "These are investments aimed at improving the business environment, and the company's mid- to long-term growth potential and shareholder return appeal remain intact." She maintained a "Buy" rating and a target price of 22,000 won.

Lee added, "Kangwon Land is currently in an investment phase for expansion and improvement of its business environment," and noted, "As a result, temporary earnings contraction is expected in 2026 and 2027."

However, she stressed that "from 2028, when the new business site opens, table expansion (+25%), and the effects of room renovations are fully realized, meaningful earnings growth should become evident."