Grand Korea Leisure (114090.KS): 3Q26 Preview: Expect 3Q26E EBITDA to Decline 20% YoY

Given the modest 1% YoY increase in 3Q26 GGR and the materially higher salary and operating expense run-rate observed in 1H26A (+11% YoY), we expect GKL's 3Q26E EBITDA to decline 20% YoY to KRW20.3bn. That said, GKL has delivered double-digit YoY table volume growth from Chinese VIP and Premium Mass players for ten consecutive months since Dec-25. We believe the company's targeted marketing initiatives toward Chinese players continue to gain traction. However, reflecting relatively weak gaming volumes from non-Japanese/non-Chinese VIP and Grind Mass players, we lower our FY26-28E EBITDA forecasts by 5-8% and reduce our TP from KRW12,000 to KRW11,600. We continue to prefer KWL and Paradise over GKL. Nevertheless, we believe most of the negatives are already priced in, as the stock is trading at just 2.3x 1-yr forward EV/EBITDA, nearly 2.5 S.D. below its historical mean. Maintain Buy. GKL's 3Q26 GGR rose 1% YoY to KRW110bn (~4% lower vs. Citi's estimate of KRW115bn), as the 2% YoY growth