Hanwha Investment & Securities noted on the 23rd that it expects the boom in casinos in China to be felt domestically as well. It is estimated that the operating profit for the second quarter will surpass market expectations (consensus), and evaluations indicate that strong performance can be expected even after the third quarter. The target stock price has been raised from the previous 16,000 won to 24,000 won, and the investment opinion remains 'buy.'
PARADISE's second quarter revenue is expected to be 293.8 billion won, with an operating profit of 40.6 billion won. The operating profit is a result that exceeds the consensus of 36 billion won, likely due to improvements in the average daily rate (ADR) of hotel rooms and occupancy rates (OCC).
The strong performance in the second quarter is projected to continue into the third quarter. The bon holiday in August is expected to see an increase in tourist visits from Japan, and if visa-free entry for Chinese tourists is permitted, it's anticipated that indicators for Chinese tourists will rapidly increase from the third quarter.
There are expectations that the recovery in local performance in the casino business will flow into the domestic market. The total gaming revenue (GGR) in Macau has shown a steep recovery in the second quarter. Typically, after the Labor Day holiday in May, there is a decline in casino performance in June when the holiday effect wears off, but this year, no such decline has been observed. VIP GGR has also shown signs of recovery to 83% of pre-COVID-19 pandemic levels.
Park Soo-young, a researcher at Hanwha Investment & Securities, stated, "The warmth for the casino business is being confirmed first in Macau," and added, "When the visa-free policy is allowed in the third quarter, warmth from the indicators of Chinese tourists will be confirmed in the metropolitan area casino business sites as well."