China calls for favorable factors for South Korean casinos: brokerage

Securities firm NH Investment & Securities said the “factors” that had hindered customer access to local casinos due to China’s easing of zero-COVID policies and travel restrictions are now “resolved.”

Korea was a popular destination for Chinese tourists before the pandemic. South Korean authorities have called for COVID-19 testing of visitors arriving from mainland China, Hong Kong and Macau since China eased its COVID-19 response measures in early January, but the demand was lifted on March 11.

“We expect the [Korea-China] flight expansion expected in March to unleash curbed demand, especially among large Chinese customers,” said analyst Hezeli’s report, quoted in the Business Korea news outlet.

“For Chinese VIPs, recovery will have to unfold for the rest of 2023, but the pace will be gradual,” she added. 온라인경마

Casino operators in South Korea enjoyed a boom in business volume in the first two months of 2023.

Sales of casinos by Grand Korea Leisure Co., Ltd., a foreign-only casino operator, rose 437.2% year-on-year to just over 36.77 billion won (28.7 million won) in February. Paradise Inc., another foreign-only casino operator, reported casino sales of 44.67 billion won in February, up 162.7% from a year earlier.

In the report, Ms Lee said it was only a matter of time before “top-level figures return to pre-crisis levels” because the business environment was “completely normalized.”

The analyst pointed out, “The number of flights between the two countries will also increase significantly following the lifting of the mandatory COVID-19 test for inbound travelers from China to South Korea.”

” Against this backdrop, pent-up demand will greatly increase the number of Chinese visitors to domestic casinos,” Ms. Li wrote.

“In the case of Chinese VIPs, a gradual recovery is expected due to the poor external environment related to VIP games, such as stricter regulations on junkets and punishment of related agents,” he added.

The brokerage also said the pent-up demand from Japanese VIPs was “noteworthy” as flights between Korea and Japan increased “in line with the resumption of visa-free entry between the two countries in October.”

“In particular, for companies that are good at attracting Japanese customers, the number of Japanese VIPs is recovering to pre-pandemic levels,” the agency said.

The brokerage also made some comments on Kangwon Land, the only casino resort operator in Korea that is open to locals.

In April 2022, shortly after the lifting of social distancing in South Korea, “strong pent-up demands were observed in local casinos open to nationals.”

“However, sales have been below pre-pandemic levels recently as overseas travel has been smooth, and Koreans’ demand for leisure activities has shifted to overseas travel,” Lee said.

She added, “If profits stabilize, top-tier growth is expected to recover in earnest due to increased business hours and the number of tables compared to before the COVID-19 crisis.”

Kangwon Land returned to profit in the first half of 2022 with a net profit of 115.6 billion won in 2022. The company recommended a final dividend of CU350 per share for the year ending December 31, 2022.

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