1. Paradise Co.’s Q2 Earnings: Growth Coupled with Declining Profitability
Paradise Co. reported KRW 567.7 billion in revenue for the first half of 2025, a 5.53% increase year-on-year. However, operating profit and net income decreased by 26.4% and 31.8%, respectively. While growth in the integrated resort segment offset the decline in the casino segment, increased costs were the primary cause of the profit decline.
2. Key IR Takeaways: 3 Points Investors Should Focus On
- Profitability Improvement Plan: A clear explanation of the factors contributing to cost increases and the strategy for improving profitability is crucial.
- Macroeconomic Risk Management: The company needs to present its strategies for addressing exchange rate and interest rate volatility.
- Integrated Resort Growth Strategy: Specific plans for enhancing competitiveness and pursuing new business ventures should be disclosed.
3. Investment Strategies: Short-Term vs. Long-Term
3.1. Short-Term Investment Strategy (Around the IR Event)
Carefully analyze the IR presentation and Q&A session to understand management’s vision and execution plan. Focus on responses to questions regarding profitability improvement strategies and risk management measures to inform investment decisions.
3.2. Long-Term Investment Strategy
Consider the growth potential of the integrated resort business, efforts to improve the financial structure, and the impact of the transfer listing. Continuous monitoring of external factors such as changes in the competitive landscape and regulatory risks is also essential.
4. Key Risk Factors
Increased competition in the casino segment, a global economic slowdown, and higher-than-expected cost increases are key risk factors. Careful analysis is required before making investment decisions.