[Click eStock] "Hana Tour, Success Depends on Post-COVID-19 Response"

Ebest Investment "Hana Tour Investment Opinion Revised from Neutral to Buy"
Benefits Expected Mainly for Major Travel Agencies

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] Despite Hana Tour's continued sluggish performance, an analysis suggests that its results will be determined by how it responds after the disappearance of COVID-19. In particular, benefits are expected to concentrate on large travel agencies capable of resuming operations. Ebest Investment & Securities has raised its target price for Hana Tour from 45,000 KRW to 102,000 KRW and upgraded its investment rating from 'Hold' to 'Buy.'

According to Ebest Investment & Securities on the 18th, the recovery of Hana Tour remains uncertain. Although the situation is force majeure due to COVID-19, unless the number of outbound travelers recovers, the number of customers sent by Hana Tour is expected to continue to decline sharply. Analyst An Jin-ah of Ebest Investment & Securities explained, "We expected profit level recovery to begin in the third quarter of this year, but the prolonged COVID-19 situation remains uncertain," adding, "There is a second pandemic wave of COVID-19, and the development of vaccines and treatments is delayed."

The key to sales recovery appears to depend on when travel becomes possible. However, deferred demand for travel has increased, and surviving travel agencies are expected to benefit. Especially, only travel agencies prepared for the changed travel patterns after COVID-19 can absorb the latent demand and are expected to turn around quickly.

Accordingly, it is anticipated that benefits will concentrate on large travel agencies like Hana Tour. Analyst An said, "As the unit price of overseas travel rises along with deferred demand, large travel agencies are the ones that can immediately respond to the resumption of operations," adding, "Hana Tour is operating about 30% of its workforce and is preparing product operation plans in response to COVID-19." Additionally, for furloughed employees' wages, the company has applied for government employment retention subsidies and has been receiving payments since last month, developing products to respond to the post-COVID-19 era with minimal staff. Starting in July, it is expected to launch its own brand (PB) advertising and actively market travel products for the year-end season.