New Silk Road Jeju Casino's First Half Gross Profit Up 19 Pct

Hong Kong-listed New Silk Road Culture Ltd, which operates a foreign-only casino business in South Korea and hopes to develop its own casino resort, posted a loss of HK$17.6 million ($2.2 million) in the first half of 2019 from continuous operations. That compares with a loss of HK$14.6 million a year earlier.

During the reporting period, the group's main sources of revenue were casino operations through its existing Mega Luck casino operations (pictured) at the Jeju KAL Hotel in Jeju Island, South Korea, and sales and distribution of wine and Chinese alcoholic beverages, Baiju.

New Silk Road told the Hong Kong Stock Exchange on Tuesday that its gaming operations in the first half of 2019 generated HK$63.1 million in revenue, up 16.2% from a year earlier. "These increases were primarily contributed by VIP gaming operations," the company said.

Game sales accounted for 43.2% of the group's total sales in the first half of 2019, compared with 36.0% share in the same period a year earlier.

"Benefits from a successful VIP gaming campaign run by our House team, gross profit from our casino business achieved promising growth of 56.3% to approximately HK$18.9 million in the first six months of 2019," New Silkroad said.

In its interim results, New Silk Road said it maintained a "conservative" outlook on the property's business trends despite the positive performance of its casino operations on Jeju Island. This was due to "political tensions between South Korea and neighboring countries, along with changes in the casino management team."

New Silk Road said in March that the governor of Jeju Island formally granted the group's subsidiary, Macrolink Mounds of Honor, Inc., a new casino venture, to pursue the Mounds of Honor on Jeju Island.

In 2017, New Silk Road announced that it had taken control of the macrolink hills of glory, injecting funds to develop a large resort complex on the hills of glory, including a "large casino".

"We are very pleased to be able to begin the funding process for the development of the Hill of Glory Phase 1 with formal development approval from the Governor of Jeju," New Silk Road said in a filing on Tuesday.

The project will be developed in three phases, with the first being "a five-star hotel with more than 580 rooms, with extensive entertainment and recreation facilities, restaurants, high-end shops, and hydrotherapy spas."

The budget for the new Jeju casino resort plan was not specified in the results report. New Silk Road also did not elaborate on casinos in the resort in its latest report.

New Silkroad also said it had "suspended" its internet-based P2P financial platform business in mainland China called Niiwoo Financial.

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