GolfZon jumps on President's lift of golf ban

By Lee Hyo-sik

The share prices of GolfZon, the maker of indoor golf simulators, closed higher Wednesday, buoyed by President Park Geun-hye’s favorable remarks toward the golf industry, analysts said.

Companies that operate golf courses across the country will also likely get a lift from Park’s change of heart toward the leisure industry, once dubbed the “hot bed of corruption.”

Before a Cabinet meeting at Cheong Wa Dae, Tuesday, President Park said she would like ministers to draw up measures to revitalize the sagging domestic golf industry.

The President said she never prohibited government officials from playing golf.

However, it has been an unspoken rule that public-sector employees shouldn’t golf if they want to keep their jobs since Park took the nation’s highest office in February 2013.

While discussing the 2015 biannual Presidents Cup, which will be held in Songdo in October, she said that “It is meaningful Korea is the first Asian nation to host one of the world’s most prestigious golf events. I was asked on many occasions that the government needs to make more efforts to revitalize the struggling industry.”

Park is an honorary chairperson of the Presidents Cup 2015. Each of the two teams is composed of 12 players: one from the United States and an international team representing the rest of the world, including Europe.

The President asked Kim Jong-deok, minister of culture, sports and tourism to draft measures to reinvigorate the golf industry.

Following Park’s remarks, shares of GolfZon soared over 10 percent during the Wednesday’s trading, but closed only 1.15 percent higher to 26,300 won from Tuesday, due to profit taking.

“It is too early to say whether what the President said would provide a boost to us and other golf-industry companies,” a GolfZon spokesman said. “It would be great if the government takes steps to help the leisure industry, which has been struggling for years. If more Koreans play golf here, it will create new jobs, and support restaurants and other businesses catering to golfers.”

Daishin Securities recently issued a positive outlook for the company, saying that its operating profits will increase this year from 2014 as many of its franchise shops replace old simulators with new ones. The securities firms raised GolfZon’s target price to 39,000 won per share.

“GolfZon shares will perform stronger in the coming months on the improving fundamentals,” Daishin Securities analyst Kim Yoon-jin said. “What the President said Tuesday will provide a further momentum for the company.”

Businesses running golf course also saw their shares rise Wednesday on expectations that the government would soon lift regulations on and introduce support measures for the golf industry.

Shares of Emerson Pacific, which operates four courses across the country including the Ananti Club Seoul in Gapyeong, Gyeonggi Province, jumped 1.44 percent Wednesday to 14,050 won.

C&S Asset Management, which runs three golf courses, hit the daily limit high of 14.81 percent closing at 2,675 won.