JP Morgan cites slow recovery for Korea’s Kangwon Land

International brokerage and financial firm JP Morgan says Kangwon Land, Inc.’s profit yet to normalize; operating profit to decline for Q1 2023

Original story by GGRAsia

Brokerage JP Morgan Securities (Asia Pacific) Ltd says profit normalization for casino firm Kangwon Land Inc “seems unlikely, with no sign of a turnaround” more than a year after the property’s reopening, following restrictions linked to the Covid-19 pandemic.

Kangwon Land, Inc. is the promoter of Kangwon Land, which is the only South Korean casino resort permitted to let locals gamble.

“The pace of recovery has been quite slow since its reopening in May 2022,” wrote analysts DS Kim and Mufan Shi in a Thursday memo.

They added: “VIP trend has been hovering at only 50 percent of pre-Covid levels, and mass recovery – albeit back to circa 100 percent levels – has also been disappointing if we consider 20 percent capacity expansion.”

“We had initially believed that this was just a matter of time, but we are disappointed to see demand flatlining for three consecutive quarters,” stated the brokerage.

“Our checks indicate traffic levels to Kangwon Land casino were not too different in second quarter versus first quarter,” said the analysts.

Kangwon Land Inc reported a net profit attributable to shareholders of KRW101.54 billion (US$80.2 million currently) in the first quarter of 2023, on sales of KRW358.12 billion, the latter up 7.0 percent quarter-on-quarter.

In Thursday’s note, JP Morgan said the slow business recovery pace at Kangwon Land Inc was “puzzling”.

That was because “all other major gaming jurisdictions” that the institution follows – including Las Vegas, Singapore, the Philippines, and the foreigner-only casinos in South Korea – “have seen a consistent ramp-up in demand to 100 percent to 130 percent of pre-Covid levels within about a year of re-opening, even without capacity expansion”.

To learn more about JP Morgan’s outlook on Kangwon Land, including other forecasts, read the original article at https://www.ggrasia.com/kangwon-lands-recovery-pace-quite-slow-brokerage/

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