Stock prices for major travel agencies are climbing, spurred by China’s new visa-free policy aimed at attracting Korean tourists.
This week, Hana Securities raised its target price for Modetour, a prominent travel agency listed on the Kosdaq, to 13,500 won ($9.66), while maintaining a “buy” recommendation.
The brokerage explained that Modetour stands to gain significantly from China’s recent policy change. On November 8, Beijing announced it would allow Korean nationals to enter China without a visa for up to 15 days. The exemption applies to tourism, business, family visits, and transit, and marks the first time in over 30 years of diplomatic relations that such a policy has been introduced. The visa exemption will remain in effect until December 31, 2025.
Hana Securities expects a surge in Korean tourist arrivals to China, starting in the first quarter of 2025, but cautioned that travel companies will need time to develop new packages to meet the demand.
Similarly, Daishin Securities has upgraded its outlook on Hana Tour, South Korea’s largest travel agency, listed on the KOSPI. The firm raised its target price for Hana Tour to 75,000 won, also recommending a “buy” position.
Daishin Securities anticipates strong growth for Hana Tour in 2025, with a significant increase in operating profit. The company is preparing to introduce a wide array of tour packages to China, contributing to a projected 41% increase in next year’s operating profit to 71.6 billion won.
However, some industry experts warn that the market should not be overly optimistic about the long-term impact of China’s visa-free policy on Korean tourism. These sources pointed out that a Korean traveler was denied entry into China on November 15. They noted that Chinese authorities can be selective with enforcement, which could influence travel demand.
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