The stock traded at 19,080 won on Tuesday morning, leaving Hana's target roughly 47 percent above current levels.
Shares have lagged the operational momentum since falling 6.84 percent on December 17, 2025, after President Lee Jae Myung publicly characterized foreign-only casino licenses granted to private operators as preferential treatment and ordered the Ministry of Culture, Sports and Tourism to review the framework.
The ministry has not announced specific changes in the months since.
Lotte Tourism Development is one of three listed foreign-only casino operators in Korea — Paradise (034230) and Grand Korea Leisure (114090) being the others — a category restricted to non-Korean nationals and distinct from Kangwon Land, the only Korean casino open to domestic players.
Its first-quarter earnings, disclosed May 14, made the divergence among the three sharper than at any point since the pandemic recovery began.
Lotte Tourism Development reported revenue of 156.2 billion won and operating profit of 28.8 billion won, up 28.1 percent and 121.5 percent respectively, with operating margin rising to 18.4 percent from 8.3 percent a year earlier.
Paradise reported a 34.9 percent drop in operating profit despite 3.8 percent revenue growth. Grand Korea Leisure, which leases space inside three hotels and pays 30 to 40 billion won in annual rent, saw operating profit fall 10.4 percent.
The Jeju Dream Tower's casino segment drove the outperformance. Casino revenue rose 40.3 percent to 118.6 billion won, visitor entries grew 37.3 percent to 150,553, and the table drop — money exchanged for chips — rose 36.7 percent to 573.9 billion won.
The casino's hold rate, the share of money the house wins, reached 22.6 percent in April, approaching the 26.1 percent average held by Macau's nine major Cotai integrated resorts.
Hana Securities' bull case rests on three levers. Casino tables increased from 149 in 2024 to 169 by first quarter of 2026 with three more planned. Slot machines will expand from 287 in 2025 to 371 this year.
Of the 1,600 hotel rooms at the complex, the share offered as casino complimentary inventory has grown from 30 percent to between 45 percent and 50 percent, with Hana estimating 60 percent could push monthly casino revenue to 60 billion won.
A new rolling commission program launching in May leverages Korea's 15 percent casino tax rate against Macau's 37 percent, and could add more than 100 billion won in annual revenue, according to analyst Lee Ki-hoon.
The structural backdrop is the return of Chinese tourists to Jeju under the island's visa-free entry program and the lifting of China's unofficial restrictions on Korean tourism.
Casino drop at the Dream Tower rose to 2.77 trillion won in 2025 from 1.73 trillion won in 2024, a 60 percent increase. Foreign hotel occupancy at the in-house Grand Hyatt Jeju rose to 73.5 percent in Q1 from 66.8 percent.
Debt remains the principal overhang. The company refinanced an 839 billion won secured loan in November 2024, cutting annual interest by about 20 billion won, but still pays roughly 100 billion won in annual interest costs.
Hana Securities said additional refinancing should become available in the second half of 2026, when stronger cash flow, the new rolling program and peak tourism season are projected to converge.
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