Resort, telecom shares to get boost from Olympics

By Park Hyong-ki

Resort, tourism and telecom shares are expected to see gains going forward as Korea prepares for the 2018 PyeongChang Winter Olympics in Gangwon Province, analysts say.

Yong Pyong Resort, a listed comprehensive resort with ski slopes, water park, hotels and golf courses, has been highlighted to benefit the most from infrastructure expansion for the Olympic Games.

Yong Pyong, located in Daegwallyeong, PyeongChang, has been chosen as one of the main venues for the Olympics.

Its Rainbow Slope will be used for alpine skiing competitions. The country’s first ski resort noted that its slopes have been used for major alpine skiing competitions since 1998, beginning with the Alpine Skiing World Cup of the International Ski Federation.

To accommodate a high number of visitors to the Olympics, the company said it will build a new youth hostel with 126 rooms by November 2017.

“The company plans to develop a hostel that meets international standards in safety, convenience and interior quality as it has been designated as the Olympic Games’ main accommodation,” Yong Pyong said in a regulatory filing.

The company’s board decided on the plan last June and started construction in July, it added.

In addition to a forecast of positive earnings, national infrastructure will be expanded for the Olympics, with highways and high-speed railways connecting Seoul, southern Gyeonggi Province and PyeongChang.

The company has been seeing a 7.5 percent increase in the number of tourists visiting its resort annually between 2006 and 2015, according to Taurus Investment & Securities.

As Yong Pyong seeks to further redevelop its resort as a large leisure town, Taurus analyst Jeon Sang-yong said the company is expected to “see gains in operating profit.”

Kangwon Land is another resort that is likely to gain from the opening of the PyeongChang Olympics.

The listed casino resort noted in its regulatory filing that infrastructure expansion and upgrades are “expected to boost tourism to Gangwon Province,” which has faced low accessibility because of the lack of public transportation to the region.

Also, SK Telecom, KT and LG Uplus ― Korea’s three telecom operators ― are likely to gain favorable exposure from the Olympics as they prepare to showcase their 5G mobile services at the international sports gala.

KT, the country’s second largest mobile carrier, is the official telecom operator for the Olympics, but all three will show off their 5G prowess, enabling visitors to watch games in ultra-high definition.