Kim Hyun-soo, CEO of Lotte Rental, "We will become a rental company covering all services in daily life"

Rental Car Market Share 22% in Q1, No.1 in Korea
Securing Mobility Investment and Financial Stability with Public Offering Funds

General Public Subscription Scheduled for 9th-10th

[Asia Economy Reporter Minji Lee] “Through listing on the KOSPI, we will lead the market as a future mobility platform leader and become the No.1 rental company in Korea that encompasses all services in daily life.”

On the 2nd, Kim Hyun-soo, CEO of Lotte Rental, said this at an online IPO press conference. Lotte Rental is a comprehensive rental company in Korea covering all mobility and daily rental services, including long- and short-term rental cars, auto leasing, used cars, car sharing, and general rentals. Its major subsidiaries include the car sharing service company ‘Greencar’, rental car maintenance company ‘Lotte Auto Care’, and leasing and financial installment company ‘Lotte Auto Lease’. It also has overseas subsidiaries in Vietnam and Thailand.

Based on a stable business portfolio, each business sector has grown evenly, achieving sales of KRW 2.2521 trillion last year. In the first quarter of this year, it recorded sales of KRW 588.9 billion, operating profit of KRW 49.2 billion, and net profit of KRW 18.6 billion, increasing by 8.7%, 49.1%, and 144.7% respectively compared to the same period last year.

Lotte Rental’s market share in the rental car sector was 22% as of the first quarter, maintaining its position as the No.1 operator since starting the auto rental business in 1989. The B2C long-term rental car segment is showing strong growth through expanded sales channels such as home shopping launches and the introduction of new IoT car services, along with differentiated services. The B2B segment is improving profitability by avoiding low-price bids and enhancing asset efficiency through return centers. The short-term rental car segment is expanding its service scope through spot optimization and vehicle delivery services. Additionally, Lotte Rental’s used car auction business provides stable auction volumes by securing its own inventory, unique in the used car industry, in addition to consigned and purchased vehicles. CEO Kim Hyun-soo stated, “Auto rental holds a solid market dominance and its sales network is superior compared to competitors.”

The general rental segment, which includes rental of office equipment, measuring instruments, aerial work platforms, and forklifts, maintains an operating profit margin of over 10% annually. Existing sales are expanding due to recovery in the construction market and increased logistics, while new items such as unmanned devices, robots, and mobile rental products are being developed.

Among subsidiaries, Greencar is enhancing competitiveness in the car sharing market through synergy with Lotte Rental and differentiated vehicle management by Lotte Auto Care. CEO Kim explained, “The number of vehicles increased from 3,150 in 2015 to 8,070 last year. With increased vehicle utilization rates and higher revenue per vehicle, we achieved operating profit profitability for the first time in the car sharing industry last year.”

Lotte Rental is determined to secure future mobility business capabilities through building an electric vehicle-exclusive car sharing platform and collaborating on autonomous driving technology. To this end, it has signed MOUs with autonomous driving technology company ‘42dot’ and leading electric vehicle battery manufacturer ‘LG Energy Solution’, continuing its efforts to build a future mobility ecosystem. Approximately KRW 100 billion of the public offering funds will also be invested in the mobility business. CEO Kim Hyun-soo said, “We will use the public offering funds to invest in new growth mobility and secure financial stability. Of the remaining funds, KRW 80 billion will be allocated to general rentals, and the rest will be used for electric vehicle purchases and other purposes in the auto rental business.”

The total number of shares offered by Lotte Rental is 14,422,000 shares (49.99% secondary sale), with a desired offering price of KRW 49,000 to 59,000 per share, and the expected offering amount is KRW 677.8 billion to 850.9 billion. Demand forecasting will be conducted on the 3rd and 4th to finalize the offering price, followed by general subscription on the 9th and 10th. The listing is scheduled for mid-August. The joint lead managers for the listing are Korea Investment & Securities and NH Investment & Securities, with KB Securities as a co-manager.