Kiwoom Securities announced on August 5 that it has maintained a "buy" rating on Kangwon Land but lowered its target price from 22,000 won to 18,000 won, citing the significant impact of room renovations on operating performance.
Kangwon Land reported a consolidated revenue of 345.6 billion won for the second quarter, a 4.2% decrease compared to the same period last year, while operating profit fell by 26.2% to 43.2 billion won. Although revenue met market expectations, operating profit fell short of forecasts. The decline in revenue due to room renovations was not substantial, but fixed cost burdens worsened profitability.
Im Soo-jin, a researcher at Kiwoom Securities, explained, "Visitor numbers and drop amounts have continued to weaken through July, prompting us to revise down our performance estimates for the second half of the year and for 2027." Revenue from the casino segment decreased by 3.5% year-on-year to 319.9 billion won, while non-casino revenue dropped by 12.3% to 25.7 billion won. The hotel and condo renovations are expected to be completed in the first quarter of 2028 and the fourth quarter of 2027, respectively.
However, Kiwoom Securities anticipates that the company's shareholder return policy will support the stock price. The estimated dividend per share (DPS) for this year is projected to be 740 won, with a dividend yield of approximately 5.1%. Additionally, the planned buyback of 7.4% of its own shares and further repurchases are expected to enhance per-share value.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.