GGRAsia – Paradise City a revenue booster for Paradise Co: analyst

Paradise City a revenue booster for Paradise Co: analyst

Jan 23, 2017 Newsdesk Latest News, Rest of Asia, Top of the deck

South Korean casino operator Paradise Co Ltd is likely to post a 35.3 percent increase in sales in full-year 2017, fuelled by the expected April opening of casino resort Paradise City, said Seoul-based brokerage Shinhan Investment Corp.

“Paradise Co as a whole is forecast to post sales of KRW938.6 billion [US$805.3 million]” in 2017, said analyst June-won Sung in a note issued on Thursday. The figure includes KRW751.0-billion in casino sales, up 24.8 percent in year-on-year terms.

Shinhan Investment, a subsidiary of Shinhan Financial Group Co Ltd, provides security brokerage and investment banking services in South Korea.

Casino revenue at Paradise Co rose 6.2 percent in full-year 2016, the firm said in a filing to the Korea Exchange earlier this month. Such revenue was KRW603.13 billion compared to KRW567.88 billion in full-year 2015.

Paradise Co is currently constructing a foreigner-only casino resort called Paradise City, in Incheon, near the main international airport serving the country’s capital Seoul. Paradise City is a joint venture project between the South Korean casino operator and Japanese pachinko operator Sega Sammy Holdings Inc. The scheme broke ground in 2014 and is scheduled to open in April 2017, Paradise Co announced in June.

Paradise Co already operates a casino in Incheon.

Shinhan Investment’s Mr Sung said he expected Paradise Co to record “total operating profit of KRW54.3 billion (-24.3 percent year-on-year) and net profit of KRW23.1 billion (-64.6 percent year-on-year) in 2017.”

He said the profit forecasts already included depreciation costs, interest and other expenses related to Paradise City.

Mr Sung stated: “The share price [of Paradise Co] is projected to climb further if monthly earnings of the new casino resort come in line with the consensus after the opening. Costs may become an issue… if sales fall short of expectations.”