Paradise Co to report record-breaking Q2, analysts say

Record-breaking earnings in the second quarter are expected due to pent-up demand and cost-cutting measures.

South Korea.- Analysts at JP Morgan Securities (Asia Pacific) have released a note suggesting that Paradise Co will achieve a record-breaking quarter in the three months leading up to June 30. Analysts DS Kim and Mufan Shi forecast that second-quarter operating profit could surpass full-year 2019’s KRW52bn (US$436.7m).

JP Morgan estimates that the second-quarter operating profit for 2023 could reach KRW59.0bn (US$469.4m). During the first quarter of 2023, Paradise Co reported a net profit attributable to shareholders of KRW6.99bn (US$5.3m). Sales were KRW191.52bn (US$145.2m), down 0.9 per cent quarter-on-quarter but up 92 per cent in year-on-year terms

JP Morgan predicted that Paradise Co will record revenue of approximately KRW280bn (US$233.3m) and a net profit of around KRW33bn (US$276.6m) for the April to June period. The analysts acknowledged the challenges in assessing the pace of recovery for Paradise Co as the reopening process has been uneven across the company’s key source markets, including expats in South Korea, Japanese visitors, and Chinese tourists.

However, China VIPs are the only segment that has not fully recovered. The company’s strategic reduction in staff during the downturn, along with effective cost management, has contributed to improved margins and enhanced operational efficiency.

JP Morgan estimated that Paradise Co’s margins for earnings before interest, taxation, depreciation, and amortization (EBITDA) and operating profit could nearly double or triple, reaching approximately 25 per cent and 15 per cent, respectively, in fiscal year 2023.