[Alpha Biz=(Chicago) Reporter Kim Jisun] Yuanta Securities lowered the target price of Grand Korea Leisure (GKL) to 17,000 won from 22,000 won on the 16th, based on poor performance in the fourth quarter of last year and prospects for intensifying competition.

GKL recently announced that sales in the fourth quarter of last year were 90.7 billion won, down 2.2% year-on-year, and operating losses of 900 million won.

"The recovery rate of China's VIP demand was insufficient at 73 percent, and sales corresponding to the increase in comp (VIP customer reserve) costs and promotion costs have not been secured," Yuanta Securities said. "Casino sales fell 2.2 percent, which is significantly sluggish compared to 35.4 percent growth in competitors," Yuanta Securities said in a report.

Yuanta Securities also said, "We expect sales in the first quarter of this year to fall 11.9% year-on-year and operating profit to fall 56.4%, which will lead to reverse growth."

Yuanta Securities went on to say, "Considering that China's VIP demand is slower than expected in the fourth quarter and that the foreign Inspire casino opened earlier this month, stock prices will take a wait-and-see stance."

However, it was positive that the company's annual performance turned into a surplus last year, and at the same time, it decided to pay dividends of 353 won per share and 21.8 billion won in total.

The investment opinion 'buy' remained the same.

 

[ⓒ 알파경제. 무단전재-재배포 금지]