[Click e-Stock] Key Points to Consider When Investing in Paradise

Heungkuk Securities has lowered its target price for Paradise Co., Ltd. from 26,000 won to 12,000 won, while maintaining a "Buy" investment rating.

On August 20, Heungkuk Securities analyst Song Ji-won stated, "The growth of the Hyatt Regency is important," adding, "The target price was calculated by applying an 11x peer average price-earnings ratio (PER) to a 12-month forward earnings per share (EPS) of 1,122 won."

Analyst Song explained, "The room occupancy rate (OCC) at the Hyatt Regency is thought to have increased to the mid-50% range this year due to an increase in inbound visitors and promotions. Considering that the weekend OCC of P-city in the second quarter of this year was 92.2% and its comp ratio was 48.3%, there is potential for the Hyatt comp ratio to increase from the current low-10% range to the high-10% range in the second half of this year." She continued, "Although there will be additional costs associated with Hyatt room promotions in the third quarter, the resulting rise in room occupancy is expected to boost revenues, making the property profitable in the second half of this year."

In the second quarter of this year, revenue was 318.1 billion won, up 8.2% compared to the same period last year, while operating profit declined 17.0% over the same period to 35.5 billion won, falling short of market expectations. Analyst Song attributed this to increases in operating expenses, comp expenses, and labor-related costs, but added, "Casino business revenue hit an all-time high at 247.5 billion won, and the hotel sector achieved strong results with P-city and Paradise Busan occupancy at 80.0% and 87.4%, respectively."

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