Grand Korea Leisure (114090.KS): 3QTD Volume Growth Momentum Continued Among JP/CN Players

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11 Aug 2026 08:51:16 ET │ 13 pages

Grand Korea Leisure (114090.KS)

3QTD Volume Growth Momentum Continued Among JP/CN Players

CITI'S TAKE

On our estimates, GKL’s 2Q26 EBITDA rose 22% YoY and was largely in line

with our expectations. GKL’s stepped-up marketing efforts have driven

double-digit gaming volume growth YoY over the past three quarters, but

we are more encouraged by its YoY and QoQ EBITDA margin expansion in

2Q26. Looking ahead to 3QTD, management sees continued growth

momentum. In July, GKL's gaming volume from both Japanese & Chinese

VIP/Premium Mass players grew in double-digits YoY. Per management,

there are no material differences in the leasing terms in the renewed 9-year

lease agreement (through 1st Oct 2035) for its casino-complex premises at

Gangnam COEX. The annual rental adjustment will be linked to Korea’s

nationwide CPI. We keep our TP on GKL unchanged at KRW12,000. After

the recent share price correction, GKL is trading undemandingly at 2.0x 1-yr

forward EV/EBITDA (~3 S.D. below historical mean). Maintain Buy.

2Q26 Results Inline — Net revenues grew 19% YoY to KRW120bn and EBITDA on our

estimates grew by 22% YoY to KRW29.2bn (2Q25: KRW23.8bn), largely in line with

our EBITDA forecast of KRW29.5bn. EBITDA margin expanded from ~23.6% in 2Q25

to ~24.2% in 2Q26, likely driven by the operating leverage from its YoY higher table

hold (2Q26: 11.6%; 2Q25: 11.1%), but partially offset by the 26% YoY increase in

salaries and the 9% YoY increase in marketing expenses. Total GGR rose 19% YoY to

KRW121bn, driven by the 14% YoY growth in overall table volume and the 0.5-ppt YoY

higher table hold rate. Table volume at Gangnam (+30%) and Busan (+23%) rose YoY,

while that at Dragon City fell by 19% YoY. Slot revenue rose 13% YoY to KRW11.4bn on

the 25% YoY increase in slot handle, but partially offset by the 1.1-ppts YoY lower hold

rate at 10.2%. GKL proposes an interim DPS of KRW60/share, par vs. 1H25.

n

Buy

Price (11 Aug 26 15:45)

W9,520

Target price

W12,000

Expected share price return

26.1%

Expected dividend yield

4.4%

Expected total return

30.5%

Market Cap

W588,866M

US$415M

Price Performance

(RIC: 114090.KS, BB: 114090 KS)

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