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KB Securities Lowers Lotte Tour Development Target Price Over Fund Levy Concerns
Consumer Services · Casinos/Gaming · yonhap_finance · 2026-09-01
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KB Securities has cut its target price for Lotte Tour Development to 23,000 KRW, citing potential increases in tourism fund levies and refinancing delays.
What Happened
Target Price Cut: KB Securities has lowered its target price for Lotte Tour Development to 23,000 KRW, citing uncertainties regarding the potential increase in the tourism promotion fund levy and delays in refinancing. Despite the cut, the firm maintains a 'Buy' rating.
Regulatory Risks: The government's proposal to raise the tourism fund levy cap from 10% to 15% could lead to an annual operating profit reduction of approximately 30 billion KRW. However, analysts believe that much of this regulatory uncertainty is already priced into the stock.
Financial Outlook: Although refinancing has been delayed, the company is expected to see significant improvements in net profit margins by 2027 through reduced financial costs and lower net debt. Positive developments regarding debt maturity are anticipated before the May deadline next year.
Growth Potential: Casino performance indicators, such as increased drop amounts per customer and improved hold rates, remain strong. While short-term headwinds persist, the firm maintains that Lotte Tour Development still possesses significant long-term growth potential.