Jeju casino op New Silkroad swings to 2018 profit

Mar 27, 2019 Newsdesk Latest News, Rest of Asia, Top of the deck  

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Hong Kong-listed New Silkroad Culturaltainment Ltd, which runs a South Korean foreigner-only casino operation and hopes to develop a casino resort in the country, swung to profit in full-year 2018, compared to a loss in 2017.

Such profit for the 12 months to December 31 was just over HKD64.41 million (US$8.2 million), compared to a HKD70.99-million loss in the prior-year period.

Revenue rose 55.9 percent, to HKD460.76 million, from just under HKD295.49 million in 2017, while overhead costs actually went down slightly. Most of the revenue expansion came via a freshly-acquired online lending business, the company said.

The group’s three main sources of revenue for the reporting period were casino operations – via its existing MegaLuck casino (pictured) in the Jeju KAL Hotel on South Korea’s Jeju Island; sales and distribution of wine and baijiu, a Chinese alcoholic drink; and a “newly acquired” Internet-based peer-to-peer financing platform business in mainland China, called Niiwoo Financial.

New Silkroad told the Hong Kong Stock Exchange on Wednesday, regarding its gaming operations for 2018, and referring to the importance of tourism from China to Jeju: “As a result of the improving Sino-Korean relationship and the opening of a new tourist complex, the numbers of visitors to Jeju had reached a record high.”

The group added: “With effective promotion campaigns implemented, our casino saw the growth of the VIP gaming market. Gaming revenue, which represented approximately 22.5 percent of the group’s revenue, grew by 11.9 percent to approximately HKD103.6 million.”

Earlier this month New Silkroad said in a filing that Jeju’s governor had given a subsidiary, Macrolink Glorious Hill Co Ltd, formal permission to pursue its new casino venture, Glorious Hill, on the island.

In its annual results New Silkroad said it was “pleased to have received the formal development approval” for the scheme, which it said would include “five-star hotels, commercial and residential real estate, a boutique shopping centre, theme park, [and] golf course and academy”.

A budget for the new Jeju casino resort scheme was not specified in the results filing. But the group said that for 2019 it had earmarked a total of HKD943 million “mainly” for a real estate project in Canada and one in Australia, as well as for Glorious Hill.

New Silkroad said Niiwoo Financial had contributed approximately HKD153.1 million in actual revenue, upping the group’s annual tally “significantly”.

Peer-to-peer lending has recently become popular among some Chinese consumers that investment analysts have said found it hard to access loans via China’s conventional banking system. But a report this month from brokerage Sanford C. Bernstein Ltd noted that – on the Chinese mainland at least – such peer-to-peer lending had been facing regulatory headwinds starting last summer.

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