Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Thawing Seoul-Beijing ties boost tourism, beauty, entertainment stocks
Chinese tourists arriving on a car ferry exit the international arrival terminal at a port in Incheon, Feb. 28, 2024. Newsis
By Yi Whan-woo
Shares of KOSPI-listed companies with products in high demand from Chinese tourists are rapidly gaining momentum as Korea and China work to restore ties following Beijing’s years-long ban on Korean pop culture, according to analysts Monday.
The rally is being led by companies such as Paradise, Lotte Tour Development, Hotel Shilla, APR and HYBE, which operate in the tourism, hospitality, beauty and entertainment sectors. These sectors are closely tied to hallyu, the global cultural phenomenon of Korean pop music, films, and dramas.
Paradise, a foreigner-only casino, hit an intraday high of 22,600 won ($16.27) Friday, marking a new 52-week high. It inched down 0.46 percent to close at 21,550 won Monday.
Lotte Tour Development, the developer and operator of Jeju Dream Tower, saw its Friday stock price reach a three-year high of 18,840 won — a 167 percent surge from its yearly low of 7,060 won — although it dropped 2.82 percent to end at 17,240 won Monday.
Located on Jeju Island, Jeju Dream Tower is the island’s largest and tallest integrated luxury resort and primarily targets Chinese tourists.
Hotel Shilla, which operates the five-star Shilla Seoul and duty-free stores, has been on a winning streak since Aug. 4, climbing past 50,000 won per share after trading in the mid-40,000 won range. It finished at 50,600 won on both Friday and Monday.
APR, Korea’s top beauty company by market capitalization, set a new 52-week high of 239,000 won Friday, although it slid 1.96 percent to end at 225,500 won Monday.
For K-pop powerhouse HYBE, its market capitalization has surpassed 12.1 trillion won, allowing it to re-enter the KOSPI top 50 market cap list for the first time in two weeks. It dropped 0.69 percent to end at 289,000 won Monday.
The rally follows the Korean government’s announcement on Wednesday to temporarily offer visa-free entry to group tourists from China from Sept. 29 through June 30 next year.
The measure will take effect amid expectations that bilateral relations will improve under the Lee Jae Myung administration, who is viewed as more pro-China than his predecessor.
Chinese President Xi Jinping is expected to visit Korea for the Asia-Pacific Economic Cooperation (APEC) Summit in Gyeongju, North Gyeongsang Province, which is slated from Oct. 31 to Nov. 1. Xi last visited Korea in July 2014.
Hallyu has captivated international fans and fueled deeper interest in Korean culture, including food, fashion, traditions and lifestyle, all of which have become increasingly familiar globally through exposure to Korean media.
Despite the strength of hallyu, Korean companies had reaped limited revenue from Chinese tourists in recent years due to Beijing’s prolonged ban on Korean pop culture and group tours to Korea.
The ban was widely seen as retaliation for deployment of the U.S. THAAD missile defense system in Korea in 2017, under an agreement between Seoul and Washington.
Market observers said thawing diplomatic ties between the two countries are likely to boost Chinese tourist-related stocks at least through early November.