Paradise: More rooms, more upside; upgrade to Buy

研报英文原文证据摘录

Paradise: More rooms, more upside; upgrade to Buy

BS, diluted) (Won)

growth into higher casino revenue, with operating leverage materializing from 2027E.

From To % ch Cons.

12/26E 1,257 1,094 -13 1,046

Mass becomes the clearer growth driver 12/27E 1,358 1,445 6 1,286

We think Paradise looks well positioned to benefit from Korea's inbound upcycle given 12/28E 1,433 1,680 17 1,449

its expanded hotel room capacity. Mass demand has remained resilient YTD, supported

Ju Seong Leeby strong inbound traffic amid a weak KRW and political tension between China and

Analyst

Japan, which could make Korea a more attractive destination for foreign travellers. juseong.lee@ubs.com

Korea's 5M26 inbound traffic reached 8.7mn (+21% YoY), with 4M26 travel receipts at +82-2-3702 8106

a record-high Won12.4trn (+34% YoY), underscoring strong momentum in both traffic

Jae Hyung Choiand spending. We forecast Paradise's mass table drop to grow at a 16% CAGR over

2025-28E, lifting mass mix from 23% in 2025 to 28% by 2028E. Regional momentum is jaehyung.choi@ubs.com

also improving, with table drop at Busan/Jeju up 59%/47% YoY in 5M26, respectively. +82-2-3702 8172

Valuation: trading at 9x 2027E PE, -1SD below its historical average

We cut 2026E EPS by 13% reflecting a lower 2025 base, but raise 2027/28E EPS by

6%/17% on clearer operating leverage from 2027E. Our 2027/28E OP forecasts are

7%/20% above consensus despite broadly in-line revenue, suggesting the market has

yet to fully price in P-City's enhanced capacity to monetize additional Mass / VIP

customers. We raise our PT by 41% to Won27,000 and switch our valuation basis from

EV/EBITDA to PE, as recurring earnings have become a more relevant anchor since 2023.

Our new PT is based on 19x 2027E PE, the average in 2012-14 earnings upcycle, when