[Click eStock] NO Japan and COVID-19... Hana Tour Still Under 'Dark Clouds'

Following Japan, China and Southeast Asia routes also sluggish
Duty-free shops fortunately hold steady... "Stock rebound possible only after COVID-19 impact subsides"

[Asia Economy Reporter Minwoo Lee] Hana Tour posted results in the fourth quarter of last year that fell significantly short of market expectations. The sluggish performance on Japan routes combined with the impact of the novel coronavirus (COVID-19) is expected to continue causing poor results going forward.

On the 21st, Hyundai Motor Securities lowered Hana Tour's target stock price to 45,000 KRW, down about 20% from the 56,000 KRW suggested on the 14th of last month. The investment rating was maintained at 'Market Perform.'

This is analyzed to be due to all routes performing poorly as a result of the COVID-19 aftermath, which also expanded losses in the separate business segment. Last year, Hana Tour's sales were 762.3 billion KRW, down about 8% compared to the previous year. Operating profit was 7.3 billion KRW, a 71% decrease from 25.1 billion KRW the previous year. These figures are well below both Hyundai Motor Securities' estimates and market expectations.

Researcher Seongman Yoo of Hyundai Motor Securities explained, "With the sluggish Japan routes compounded by the COVID-19 impact, routes to China and Southeast Asia also sharply declined. Due to the overall atmosphere of refraining from overseas travel, all routes are underperforming, resulting in the separate business segment recording a loss in the mid-3 billion KRW range, and the deficit is expected to increase further in the first quarter of this year."

However, the duty-free shop segment is considered to have entered a stabilization phase after recording an operating loss in the mid-100 million KRW range in the fourth quarter of last year. The impact of COVID-19 was also evaluated to be relatively minor. During the same period, the business hotel segment posted operating profits in the mid-2 billion KRW range, but its performance is expected to decline in the first quarter of this year due to COVID-19. Researcher Yoo predicted, "Both performance and stock prices can rebound only after the coronavirus is eradicated."