Kangwon Land Inc, operator of the only casino in South Korea at which locals are permitted to gamble, has announced a Value-up Plan aimed at enhancing shareholder value and investment appeal.
In a detailed presentation filed with the Korea Exchange, the company unveiled plans to achieve a 60% total shareholder payout ratio between now and 2026, to be achieved by implementing a minimum dividend payout ratio of 50% and improving per share value via KRW100 billion (US$73 million) in buybacks. This would include KRW40 billion (US$29 million) in buybacks this year and another KRW60 billion (US$44 million) in 2025 and 2026 combined.
Kangwon Land explained, “The company’s stock price was on the rise until 2016 due to the expansion of business facilities and the increase in sales but has since been on the decline due to complex reasons, such as casino regulations, the COVID-19 pandemic, illicit gambling, customer outflow due to overseas excursions, and lackluster performance.”
The company added that its PBR (Price-to-book ratio) has remained low at less than 1x since 2003 while its PER (Price-to-earnings ratio) is significantly lower than the market average and peers.
“These are attributed to the market’s overall evaluation of casino demand and performance, regulatory environment and growth potential as underperforming,” Kangwon Land said. “It is necessary to enhance investment appeal through profit improvement, presenting growth strategies and strengthening shareholder returns.”
Dividends, the company noted, have traditionally been determined by considering the current management situation without prior announcement of any specific dividend policy to the market.
“To enhance shareholder value, a mid-term dividend policy is required, aimed at enhancing predictability and stability, along with additional shareholder return measures such as buybacks,” it said.
Kangwon Land will also look to achieve 100% compliance with “Key Indicators of Corporate Governance” through focused improvements in the protection of minority shareholder rights and interests, with five specific indicators outlined as targets for improvement. These are the implementation of electronic voting, notifying shareholders of dividend policy and implantation plan at least once a year, providing predictability of cash dividends, providing notice of convocation four weeks prior to the annual shareholder meeting, and establishing and operating a CEO succession plan.
The Value-up plan follows Kangwon Land’s recent announcement that it will spend US$1.9 billion to upgrade and expand its existing offerings, including a new luxury casino, a hotel and additional leisure facilities. The expansion will see the property’s casino space grow from 14,513 square meters currently to 20,261 square meters, while the total number of gaming tables will increase from 200 to 250 and gaming machines from 1,560 to 1,860.
The project is slated for completion by 2028.
Kangwon Land’s Value-up Plan specifically points to the challenges the company has faced in recent years, which include the “illegal gambling industry that has been expanding since the pandemic and competition with overseas casinos in Southeast Asia.
“In particular, the side effects of illicit gambling have caused personal/social problems, with a direct impact on the number of visitors to our casino and the decline in sales in recent years,” it said.
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