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A Leading Foreigner-Only Casino’s IPO
Hope to raise more profit through active, dynamic and diverse marketing
A Leading Foreigner-Only Casino’s IPO
  • By matthew
  • October 15, 2009, 17:44
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Grand Korea Leisure recently concluded an IPO organizer contract with Mirae Asset Securities to be listed in the securities market in the latter half of this year. Grand Korea Leisure plans to divide its 30 billion won capital (face value 10,000 won, 3 million common stocks) into 500 won of face value per stock (61.85 million common stocks). Equivalent to 30%, public offering is expected to be 180 billion won and securities market capitalization 600 billion won.

Grand Korea Leisure, owned 100% by the Korea Tourism Organization, will sell off 49% of its shares by 2010 in an effort to promote public institutions. It plans to sell 30% of its shares in October through listing and the remaining 19% in 2010. In the last quarter, Grand Korea Leisure recorded 122.69 billion won of sales, an increase of 42.1% compared to last year. Its sales target is set at 400 billion won and net profit at 67.45 billion won.

As an affiliate of Korea Tourism Organization, Grand Korea Leisure Co., Ltd., currently operates a foreigner-only casino, Seven Luck. Grand Korea Leisure was established in September 2005 for the purposes of attracting more tourists from abroad and increasing foreign capital acquisition; securing resources needed to build tourism infrastructure; and contributing to national and economic development. Grand Korea Leisure opened Seven Luck Gangnam in Seoul in January 2006. In the following May and June, it opened two more branches in Millennium Seoul Hilton and Busan Lotte, respectively. It is expected to expand its casino business by extending to the third floor of its Gangnam branch on October 9, 2009.

Foreigner-only casino Seven Luck, operated by Grand Korea Leisure, is focusing its efforts toward creating new income by implementing a variety of aggressive marketing strategies which include increasing the level of contribution to sales from newly-created markets in Southeast Asia and Russia, discovering new competent agents, strengthening alliances with organizations that specialize in attracting tourists from overseas, persuading existing top clients to stay, and creating new semi-top clients.

Marketing played a critical role in the growth of Seven Luck Casino which completely changed the existing VIP-oriented management style of the casino industry. Seven Luck Casino has strongly stood by mass marketing strategies that reach out not only to VIPs but to ordinary and group customers. It has also held various events to induce customers to return.

Seven Luck Casino is also making great efforts to open up new markets overseas, moving its attention away from Japan and China and focusing instead more on Mongolia, Russia, and Southeast Asia.

In its first business year in 2006, Grand Korea Leisure generated total sales of 129.1 million won. The following year, its sales skyrocketed to 325.1 million won. Grand Korea Leisure’s contribution to attracting tourists to Korea and acquiring foreign capital was widely recognized, and at the 35th Tourism Day event held in October 2008, it became the first company in the casino industry ever to be awarded the Tourism Promotion Trophy. And in the midst of severe economic difficulties and a foreign currency crisis in 2008, Grand Korea Leisure generated 363.35 billion won of sales, exceeding its original sales target of 320 billion won. Based on its sales last year of 360 billion won, Grand Korea Leisure yielded 102.6 billion of production ripple effect; 232.9 billion won of income ripple effect; 10,440 persons of employment ripple effect; 524.1 billion won of value-added tax effect; and 45.3 billion won of indirect tax effect. Seven Luck Casino continued its upswing in 2009 with its three branches generating 43.87 billion won in sales, the highest monthly sales in the history of the company. The 2009 sales target for Grand Korea Leisure is set at 400 billion won and its target guest number at 1 million. It also plans to make significant contributions to achieving the Korean government’s goal of attracting 7.5 million tourists from overseas and attaining US$10 billion of tourist income.