[Market Focus] "Increase in Chinese Visitors to Korea"...Casino Stocks Rally Together

On expectations of an earnings rebound driven by an increase in Chinese visitors to Korea, the share prices of the three casino companies are all on the rise.

As of 11:05 a.m. on the 4th, Paradise was trading at 19,990 won, up 1,440 won (7.76%) from the previous session. During the same time, GKL (3.56%) and Lotte Tour Development (3.48%) were also showing gains.

Securities firms focused on the recovery in foreign inbound (visits to Korea), led by Chinese tourists. On this day, Kim Youhyuk, a researcher at IBK Securities, said, "In January this year, the combined drop amount (money exchanged for gaming chips) of the three casino companies was 1.17 trillion won, up 21.9% year-on-year, and their combined net sales were 176.5 billion won, an increase of 30.2%," adding, "The number of visitors also rose 29.7% to 243,000."

By individual company, Lotte Tour Development recorded a January drop amount of 261.6 billion won (up 89.8% year-on-year) and net sales of 45.6 billion won (up 55.0%). Paradise posted a drop amount of 632.0 billion won (up 9.2%) and net sales of 94.3 billion won (up 31.4%), delivering strong results. GKL also recorded a drop amount of 273.7 billion won (up 13.6%) and net sales of 36.6 billion won (up 6.6%).

Researcher Kim said, "The January results of the three casino companies confirm that the seasonal off-peak bottom has been passed," adding, "In particular, earnings improvement driven by growth in foreign inbound has been a common trend."

He went on to say, "This year, Chinese tourists are expected to drive overall inbound growth," and emphasized, "As relations between China and Japan have rapidly deteriorated, the likelihood that Korea will benefit as a result has increased significantly. The number of Chinese visitors to Korea in December last year (390,000) exceeded the number of Chinese visitors to Japan (330,000), marking the first time in eight years since 2017 that Chinese arrivals to Korea have surpassed those to Japan."