'Short selling balance 1st place' Lotte Tourism Development, investment opinion 'buy' Why?

Kiwoom Securities diagnosed Lotte Tourism Development (032350) on the 8th that the second quarter performance would be the beginning of a rebound. We maintain our Buy rating and target price of KRW 23,500.

Lee Nam-soo, a researcher at Kiwoom Securities, predicted that EBITDA would turn around in the second quarter, saying, "2Q sales increased by 48% year-on-year to 71.2 billion won, operating loss recorded 12.7 billion won, and EBITDA will turn to the black by 7.5 billion won."

Analysts say that with the resumption of stellar-sol.com overseas flights to Jeju Island, casino visitors will increase and earnings will improve. Monthly casino performance is also expected to turn around.

As the peak season for Jeju domestic travel begins in the second quarter, it is expected that the occupancy rate (OCC) will recover to the 50% level click here as foreign tourists enter Jeju Island.

The researcher predicted that the third quarter operating profit would also turn around. It is explained that Jeju and China air routes will be actively resumed after June, and casinos and non-casinos will improve at the same time as the hotel sector overlaps with the summer peak season.

Researcher Lee said, "The quarterly cost of 80 billion won is expected to increase in variable costs due to the increase in customer acquisition, but the increase in costs can be covered because the casino and hotel sectors are improving at the same time."

In 2023, sales were expected to increase by 110.9% year-on-year to 387.4 billion won, and operating profit to turn to the black by 37.7 billion won. Researcher Lee said, “Compared to other foreign casinos in Korea, there is a speciality in the junket business.”

Meanwhile, according to the Korea Exchange, as of the 2nd, the short selling balance of Lotte Tourism Development was counted as 6,926,613 shares. This is equivalent to 9.39% of the number of listed stocks, and ranks first in the KOSPI-listed stock in terms of balance ratio.

Leave a Reply

Your email address will not be published. Required fields are marked *