[Asia Economy Reporter Park So-yeon] NH Investment & Securities maintained a buy rating and a target price of 61,000 KRW on Lotte Rental, stating that "contrary to concerns about a peak out, it is expected to continue achieving record quarterly performance in the third quarter."
According to FN Guide on the 18th, NH Investment & Securities said in a report on Lotte Rental, "The development and testing of key functions for the online B2C platform are in the final stages, and it is planned to open in October, which is expected to act as a new growth driver."
Researcher Joo Young-hoon of NH Investment & Securities said, "Lotte Rental's current stock price is at a PER of about 9 times, which is considered sufficiently attractive given its sales and profit strength."
For the third quarter on a consolidated basis, sales and operating profit are forecasted at 692 billion KRW and 87.9 billion KRW, respectively. Auto rental business sales are expected to increase by about 11% compared to the same period last year. It was analyzed that the effect of increased long-term rental car orders continues. The sales proportion of short-term rental cars in the auto rental business is only about 10%, so the impact of domestic travel demand slowdown due to the recovery of overseas travel is expected to be minimal. It was mentioned that the company can respond to interest rate hikes by raising rental car usage fees, and since this is already underway, the possibility of future profitability deterioration is also low.
The used car segment is also expected to continue its growth trend. As the sales proportion of SUVs and large vehicles increases, the average used car transaction price in the third quarter rose slightly to about 14.2 million KRW compared to the second quarter. It was reported that a high operating profit margin of over 20% is being maintained.
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