[Click e-Stock] "Lotte Tour Development Expected to Greatly Exceed Q4 Consensus on Strong Casino Performance"

On December 2, DS Investment & Securities maintained its 'Buy' investment rating and target price of 30,000 won for Lotte Tour Development, stating, "Buoyed by strong casino performance, fourth-quarter results are expected to significantly exceed market consensus."

DS Investment & Securities analysts Cho Daehyung and Kim Jinhyung stated in a report released that day, "As monthly and daily seasonality is diminishing, we can also expect growth in casino revenue even in the relatively off-peak fourth quarter." Lotte Tour Development's fourth-quarter revenue is expected to reach 191.3 billion won, up 73.9% year-on-year, with operating profit up 2,480.1% to 55.7 billion won and an operating profit margin (OPM) of 29.1%.

Lotte Tour Development recorded year-on-year growth across all indicators in November. Casino revenue reached 51.4 billion won, up 96.9% from the previous year. This was driven by a total drop amount of 262.8 billion won (up 75.4%), maintaining a monthly drop amount above 250 billion won even during the relatively off-peak period following the National Day holiday. In addition, the table hold rate improved by 2.4 percentage points from the previous month to 21.2%, contributing to the results. The number of monthly visitors was 50,620, up 41.3% year-on-year, and as a result, the customer database continued to grow by more than 4,000 net new members per month, surpassing 110,000 in total.

For December, year-end events such as baccarat promotions are planned, so further growth in net casino revenue compared to November is expected. The company is also continuously seeking ways to improve profitability. All 17 tables previously assigned to agents will now be operated directly, and the total number of tables, currently at 167, is planned to be expanded to just over 200. The analysts stated, "More than 500 rooms are still available for casino customers, so expanding the number of tables is expected to directly lead to an increase in net casino revenue. We believe that the casino's profit leverage is just beginning to accelerate, and we expect net profit to reach 78.3 billion won next year."

They added, "With additional international flights, such as to Harbin, the number of casino visitors is expected to continue to increase for the time being. In addition, due to the Hanilryeong (China's restrictions on Japanese culture), there is potential for further expansion of flight routes to Jeju International Airport. The upward revision of estimates also highlights additional valuation appeal."

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