[Click eStock] "K Car, Confirmed Growth and Profit Improvement... Target Price Raised"

On the 10th, Eugene Investment & Securities adjusted the target price of used car trading platform K-Car upward by 10% from the previous target to 15,500 KRW. The platform is evaluated to be simultaneously improving both its scale and profitability without the profitability decline typically seen during the growth phase of a platform.

K-Car recorded results in the first quarter of this year that far exceeded market consensus. Revenue increased by 16.8% to 604.4 billion KRW, while operating profit and net profit rose by 33.4% and 42.7% to 17.6 billion KRW and 11.8 billion KRW, respectively.

Analyst Lee Jae-il of Eugene Investment & Securities stated, "K-Car sold a total of 40,093 used cars in the first quarter of this year, a 7.7% increase compared to last year, combining e-commerce, online, and auction sales," and analyzed, "This surpassed the overall used car market sales growth rate, achieving a record-high effective market share of 12.5%."

As the background for the sales volume growth, he cited the expansion of mid- to high-priced vehicle sales and the spillover benefits from Hyundai Motor Group's entry into the used car market. The analyst explained, "Previously, trading focused on low-priced vehicles typical of a recession, but by expanding the market to focus on mid- to high-priced vehicles, the average selling price (ASP) increased," and added, "The advantage of being priced lower than Hyundai Motor Group's certified used cars highlighted the spillover benefits."

He praised, "If the United States shifts to a rate-cutting stance, the growth potential of the used car market will be re-emphasized," adding, "In a high-interest-rate environment, it is advantageous for expanding market dominance over corporate operators, and when interest rates fall, the overall car trading market can recover, positioning the business well."