Samsung Securities says it expects to see an “inevitable” slowdown in growth for Korea’s Kangwon Land in 2026 and 2027 due to upgrade and expansion works, before revenue and profit begins ticking upwards from 2028 upon completion.
The financial services firm initiated coverage of the country’s only casino for locals this week, issuing a “Buy” rating on the stock while noting that growth would be limited in the short-term after the company previously announced its expansion initiatives.
Citing issues around casino capacity, the renovation of resort facilities and increased investment costs for the establishment of a second casino, analyst Lee Hye-in said, “A slowdown in growth is inevitable in 2026–2027.”
However, from 2028, “simultaneous improvements in revenue and profit are expected following the opening of the second casino and the normalization of hotel operations.”
Kangwon Land will upon opening of the second casino expand its gaming area from 14,513 square meters to 20,261 square meters and increase its gaming capacity from 200 to 250 gaming tables and from 1,360 to 1,610 slot machines
“In addition, 757 out of a total of 1,827 rooms are scheduled to reopen after completing renovations,” the analyst said. “Consequently, in 2028, revenue is expected to increase by 12% year-on-year to KRW1.72 trillion (US$1.14 billion) and operating profit is projected to rise by 36% to KRW310.5 billion (US$206 million).”
Addressing potential shareholder concerns, Lee added, “Even if the risk of negative profit growth becomes prominent in the short term, an active shareholder return policy can serve as another incentive to withstand the slowdown in growth.
“The company maintains an active shareholder return policy with a total shareholder return rate of around 60% and a dividend payout ratio comparable to the global casino industry average.”
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