Grand Korea Leisure Co. Ltd., a major operator of South Korea-based casinos, reported a 57% year-on-year increase in the number of players from Mainland China for the three-month period ended December 31, 2014.
Thomas Kwon, a Daiwa Securities Group Ltd. analyst, stated that “Chinese gamer traffic” remained stable during the fourth quarter.
Back on December 4, Grand Korea’s stock dropped almost 10% after Chinese officials commented on the harm some residents inflict upon society by traveling abroad in order to engage in gambling activities.
On February 6, Hua Jingfeng, who is taking the position of a deputy director of the Chinese Ministry of Public Security, was quoted in local media, saying that Mainland China intends to prosecute foreign casino operators that established offices in the country so as to attract citizens to visit their venues abroad. It is believed that the considerable drop in stock was due to this statement.
Grand Korea manages two casinos in the capital of South Korea. Both venues allow only foreigners into their premises and are operated under the so-called Seven Luck brand.
The company reported that it had a total of 1.57 million visitors in 2014 and its casino drop amounted to KRW4.45 trillion or US$4.01 billion. Generally speaking, the casino drop is the sum of money that is paid in exchange for chips.
Grand Korea also announced that its revenue for the fourth quarter of 2014 grew by 5% to reach KRW149 billion. Operating profit increased 4% and amounted to KRW40.8 billion.
Company’s net profit rose 21% year-on-year to reach KRW31 billion. The increase was attributed to lower general and administrative costs, as well as to lower selling.
Daiwa released a note on the casino operator’s financial performance for the three-month period ended December 31, 2014. The research house pointed out that Grand Korea marked a significant growth in the drop at its two Seoul-based venues. Their drops increased 69% and 53%, respectively. This was ascribed to the fact that both the VIP floor and the mass-market one saw considerable visitor traffic from all countries in the Asia-Pacific region, China included.
Mr. Kwon also pointed out that the number of the visitors at the company’s venues increased 34% to a total of 510,000 for the last quarter of 2014. Japanese and Chinese players accounted for 28% and 40%, respectively.
Grand Korea stated that the number of visitors from Japan grew by 8% as compared to those who entered its premises back in 2013.
