[Click eStock] "Lotte Rental, Expected Record High 2Q Earnings"

[Asia Economy Reporter Hwang Yoon-joo] NH Investment & Securities forecasted on the 22nd that Lotte Rental will continue to achieve record quarterly performance in the second quarter. The investment opinion was maintained as 'Buy' with a target price of 61,000 KRW.

Joo Young-hoon, a researcher at NH Investment & Securities, stated, "The consolidated sales and operating profit for the second quarter are expected to increase by 11% and 22% year-on-year, reaching 675.1 billion KRW and 74.6 billion KRW, respectively."

Researcher Joo estimated, "Sales from the auto rental business are expected to increase by 13% compared to the same period last year," adding, "In the first quarter, long-term rental car orders significantly increased, and since long-term rental contracts typically last 3 to 5 years, the effect of increased orders is expected to continue for some time."

He evaluated, "If interest rate hikes continue, it is possible to respond by raising rental car usage fees, so the possibility of future profitability deterioration is also not significant."

He also anticipated continued growth in the used car sector. Researcher Joo analyzed, "The average used car transaction price in the second quarter is around 13.8 million KRW, which is slightly lower than the first quarter but still high compared to the same period last year."

He added, "An operating profit margin of over 20% will be maintained," and noted, "Unlike the first quarter, there is no issue of a decrease in the number of used car auctions."