Travel stocks soar as China grants visa-free entry to Koreans

(Yonhap)

South Korean travel and hospitality stocks gained ground on Monday, following China’s announcement on Friday to allow visa-free entry to Koreans for up to 15 days until the end of 2025.

Shares of Verygoodtour Co. went up by 29.98 percent to their upper price limit of 6,070 won ($4.4) as of 10:42 a.m. on Monday while those of Yellow Balloon Tour Co. soared 29.89 percent to 5,780 won.

Modetour Network Inc. also saw a sharp increase of 15.37 percent to 11,260 won while HanaTour Service Inc. rose 7.92 percent to 51,800 won and RedcapTour Co. gained 2.22 percent to 16,150 won.

China’s foreign ministry announced on Friday that citizens from the nine countries, including Slovakia, Iceland, Andorra, and Liechtenstein, will be allowed to enter China for business, tourism, family visits, or transit for up to 15 days without a visa.

Meanwhile, shares of Hotel Shilla Co. plunged by more than 6 percent on Monday morning, pushing brokerages to adjust the stock’s price target downward.

Shares of Hotel Shilla were trading at 40,950 won as of 10:47 a.m., down 6.08 percent from the previous session.

The decline came after the company reported an operating loss of 17 billion won for the third quarter, a sharp contrast to the 7.7 billion won in operating profit posted last year.

It is also well below the market consensus of 25.6 billion won compiled by Yonhap Infomax.

Hana Securities Co. downgraded its investment recommendation from “buy” to “neutral” and its stock price target from 61,000 won to 49,000 won.

Shinhan Investment & Securities Co. also changed its recommendation from buy to short-term buy and downgraded the target price from 55,000 won to 44,000 won.

“The fundamental appeal of the duty-free channel is declining due to changing cosmetics consumption trends and the prolonged slump in Chinese consumer spending,” said Cho Sang-hoon, an analyst from Shinhan Investment. “An upgrade in investment outlook would be possible only if there is a visible recovery in high-spending group tourists.”