South Korea’s Kangwon Land Inc, operator of a resort with the country’s only casino permitted to serve locals, is likely to face a period of slower earnings growth over the next two years. The firm’s dividend policy, however, could help support investor sentiment during that period, says a research note from Samsung Securities Co Ltd.
“A slowdown in growth is inevitable through next year, but in the short term, attention should be paid to dividends rather than growth,” wrote analyst Lee Hye-in in a Tuesday memo, cited by South Korea-based The Asia Business Daily outlet.
Ms Lee said growth was expected to remain constrained through 2027 due to a combination of limited capacity resulting from the casino’s expansion works, ongoing renovation at resort facilities, and higher investment costs linked to the development of a second casino at Kangwon Land.
The casino resort is located in the country’s east-highlands region, approximately 150 kilometres (93 miles) from the capital Seoul.
Revamp work of the VIP gaming floor at the property started in March, and is expected to extend for at least 12 months. The firm is also moving forward with a two-year hotel- and condominium-room renovation involving 757 units at the complex.
In Tuesday’s note, the Samsung Securities analyst forecast sluggish revenue growth and lower profitability in 2026 and 2027, but suggested a stronger growth phase could emerge afterwards.
According to Ms Lee, the opening of the second casino, an increase in gaming-machine capacity and the completion of hotel room renovations could support simultaneous improvements in revenue and earnings from 2028 onwards.
The analyst estimated Kangwon Land Inc could generate revenue of KRW1.72 trillion (US$1.14 billion) in 2028, with operating profit reaching KRW310.5 billion.
Despite the near-term earnings pressure, Ms Lee highlighted Kangwon Land Inc’s shareholder-return policy as a potential attraction for investors.
Kangwon Land Inc currently maintains a shareholder-return ratio of about 60 percent, said Samsung Securities, adding that the casino firm could potentially keep its dividend payout ratio above 50 percent even during periods when profits are under pressure.
Kangwon Land Inc reported a 46.8-percent year-on-year decline in its first-quarter net profit, to KRW39.67 billion, on aggregate sales that grew 3.4 percent year-on-year, to KRW378.92 billion.
