[Click eStock] "Disappointing Results" Kangwon Land Target Price Lowered by 14%

Hana Securities announced on the 5th that it has lowered its target price for Kangwon Land from 22,000 won to 19,000 won, citing the impact of weak performance following its renewal.

Kihoon Lee, an analyst at Hana Securities, stated in a company analysis report on Kangwon Land released on this day, "Considering the sluggish earnings and the limited momentum expected to persist until 2027, we are lowering our target price by 14% to 19,000 won."

He explained, "The current share price is trading at 11 times the estimated 2026 P/E, so its stock appeal is not high," but also assessed, "However, since the shareholder return rate could be up to about 14%, any additional decline would be limited." On the previous day, the closing price of Kangwon Land's shares recorded 14,500 won.

According to the previously released results, Kangwon Land's second-quarter revenue and operating profit reached 345.6 billion won and 43.2 billion won, respectively. These figures represent decreases of 9% and 37% year-on-year, falling short of market consensus. The number of visitors also declined by 3% to 560,000.

Lee explained, "Traffic and drop amounts have been weak since June compared to April and May, and this impact is estimated to have continued through July." He added, "Combined hotel and condo revenue stood at 20.3 billion won (-15%), with the number of rooms down 41% due to room renovations, but the company has been holding up through food and beverage and other sources." He projected this trend would continue in the second half of the year.

He further diagnosed that both the casino and rooms have been affected by the room renovations that began in March. He stated, "This is a positive momentum in the mid- to long-term, but for the time being, it will limit the potential for earnings growth," and emphasized, "In that sense, shareholder returns become even more important."

This year, the shareholder return rate, including treasury shares, is expected to be up to about 14% annually. Lee forecast, "A 7.4% reduction in treasury shares by August next year and an additional 20 billion won in treasury share purchases within the year are anticipated." He added, "Assuming dividends at the previous year's level (950 won) are maintained thanks to high financial income, the annual shareholder return rate could reach up to about 14%." He further noted that, depending on the Supreme Court's ruling on the lawsuit to cancel the abandoned mine fund levy, additional dividend increases may also be possible.

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