The launch of a new rolling chip program this month could add another KRW100 billion (US$66.8 million) in annual revenue to Lotte Tour Development’s Jeju Dream Tower integrated resort, one of a number of growth factors prompting brokerage Hann Securities to label the firm as its top pick in the Korean foreigner-only casino sector.
The addition of more gaming tables and slot machines to the property’s casino floor and an increase in hotel comps offered to players are also credited with the strong 1Q26 performance recently reported at the Jeju IR.
Lotte Tour recently reported a 28% year-on-year increase in revenue to KRW156.2 billion (US$104 million) in Q1, with operating profit rising 122% to KRW28.8 billion (US$19.2 million). This included a 40% increase in casino revenue to KRW118.6 billion (US$79.2 million) and 37% improvement in table drop, while visitation grew 37% to 150,553.
In a note, Hann Securities analyst Lee Ki-hoon noted that the new rolling commission program leverages Korea’s 15% tax rate against the much higher rate in Macau and some other jurisdictions, making it an attractive option for premium players.
He also noted that Jeju Dream Tower had increased its gaming tables from 149 in 2024 to 169 as of 1Q26, with more planned, while slots will expand from 287 in 2025 to 371 this year.
On comped rooms, Lee said, “The capacity of an integrated resort is determined not only by the number of tables but also by the number of hotel rooms provided to customers as promotions, that is, comps.
“The comp share among the 1,600 rooms expanded from about 30% in the first quarter of last year to 45% to 50% currently, which has led to corresponding revenue growth.
“There is still room to expand the comps, and if the share increases to 60%, achieving monthly casino revenue of KRW60 billion (US$40.1 million) will be just a matter of time.”
Hana Securities has reiterated its “Buy” rating on Lotte Tour and set a target price on shares of KRW28,000 (US$18.70) – representing a 47% increase over the current price.
It added that, while debt remains an overhang, the company had cut annual interest by around KRW20 billion (US$13.4 million) when it refinanced a KRW839 billion (US$561 million) secured loan in November 2024 and should see additional refinancing become available later this year when stronger cash flow, the new rolling program and the peak tourism season converge.
RelatedPosts
