KB Securities has lowered its target price for Lotte Tour Development to 17,000 won, citing external uncertainties such as changes in Chinese policy that are delaying profitability improvements. However, the firm anticipates a rebound if these uncertainties ease, leading to an increase in visitor numbers. The investment recommendation remains a 'buy.'
In a report released on the same day, analyst Choi Yong-hyun stated, "Lotte Tour Development continues to see growth in visitor numbers, but the growth in drop amounts per person is limited, likely due to changes in Chinese policy."
Choi added, "There is potential for a rebound in VIP drop amounts due to the effects of the October National Day holiday and the end of the tax reporting period in China."
For the third quarter of this year, the firm expects Lotte Tour Development's operating profit to fall short of market consensus. Choi projected a 5.0% decrease in revenue compared to the previous year, noting that while visitor numbers are expected to rise by 8.9%, the drop amount per person is anticipated to decrease by 5%, and the hold rate is expected to drop by 1.9 percentage points, leading to a slowdown in revenue growth.
Choi also assessed that while the company is strengthening its VIP rolling tables in the second quarter, visible effects have not yet materialized due to external uncertainties.
Nonetheless, the growth in visitor numbers is expected to continue. Choi remarked, "I believe that the number of visitors to Lotte Tour Development can still increase, as additional flights from Jeju to Macau and new routes from China are expected to contribute to this growth."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.