Golfzon sees brighter outlook on rising popularity of golf amid COVID-19

2020.07.29 15:37:04 | 2020.07.29 15:37:31

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Shares of South Korea’s golf simulation system provider Golfzon jumped around 50 percent over the past two months as the sport is gaining burst of popularity among people with limited leisure options amid coronavirus restrictions.

The Kosdaq-listed Golfzon closed up 1.56 percent to 78,200 won ($65.5) on Wednesday, up 50.4 percent from around 52,000 won as of the end of May.

The company posted a 42.6 percent year-over-year surge in operating profit to 14.1 billion won ($11.8 million) in the second quarter ended June this year, with sales rising 18.9 percent to 72.2 billion won. Its performance was beyond the market expectations.

The so-called ‘screen golf’ centers where customers can enjoy indoor golf game via simulators tend to draw the least number of visitors in the April to June period as many golfers go outdoor golf courses. But the number of rounds played at indoor courses jumped 20.3 percent from a year earlier to 16.39 million during the period, slightly lower than 17.35 million during the peak season of the previous quarter.

Lee Hyo-jin, an analyst from Meritz Securities, attributed the strong performance of Golfzon to the increasing number of golfers in Korea. The increasing demand makes it difficult for people to book outdoor golf courses, which has partly resulted in the big leap in demand for screen golf rounds.

Market experts believe the heightened demand will stay for a long period of time as the sport is also drawing a number of new participants including young people and female players.

Yoon Hyuk-jin, an analyst from SK Securities, estimated that Golfzon to record a 95.8 percent on year surge in operating profit to 15.3 billion won at the end of the year thanks to the strengthened business fundamental and improved profitability of its golf simulation system called GDR.

By Kim Gi-chul and Choi Mira

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