[Click eStock] "Lotte Rental, Difficult to Become SoCar's Largest Shareholder... Target Price Maintained at 40,000 Won"

Hana Securities maintained its buy rating and target price of 40,000 KRW for Lotte Rental on the 20th.

Lotte Rental recently announced through a public disclosure that the second sale contract of SoCar with SK has been postponed. GS Caltex, which holds about 10% of Lotte Rent-a-Car G Car, Lotte Rental's car-sharing subsidiary (Lotte Rental's stake is 84.71%), filed an injunction prohibiting Lotte Rental from acquiring additional SoCar shares and won the case. The court ruled that Lotte Rental's acquisition of SoCar shares violated the non-compete clause and that GS Caltex would suffer irreparable damage. Therefore, it is expected that Lotte Rental's additional acquisition of SoCar shares will be difficult for the time being.

Hana Securities analyst Do-Hyun An analyzed, "Regardless of SK's acquisition of shares, it is difficult for Lotte Rental to become the largest shareholder of SoCar." Lotte Rental is the second-largest shareholder with a 25.73% stake in SoCar. SK had decided to sell its existing SoCar shares (totaling 17.9%) to Lotte Rental in two phases. The first share sale (9% stake, 66 billion KRW) was completed in February 2024, while the second share sale (8.95% stake, 66 billion KRW) has been suspended. SoCar's effective largest shareholder, CEO Jae-woong Lee, purchased treasury shares, increasing the combined stake of the largest shareholder and related parties to 44.27%, widening the gap with Lotte Rental's stake to 18.53%. It was judged that regardless of SK's remaining stake (8.95%) acquisition, it is difficult for Lotte Rental to become the largest shareholder of SoCar because the largest shareholder's stake, including friendly shares, is already too high at 44.27%. Even if Lotte Rental proceeds with the second share purchase, the gap with the largest shareholder remains 9.58 percentage points.

SoCar is the market leader in the car-sharing market, operating car-sharing and mobility platform businesses. However, since Lotte Rental already has a car-sharing service, its purpose in acquiring SoCar shares was to strengthen platform cooperation. Lotte Rental is already the number one company in the domestic rental car market in terms of recognition and market share, so currently, platform synergy is considered an additional factor in terms of valuation. Analyst An forecasted, "Even excluding synergy effects with SoCar, considering Lotte Rental's leading position in the rental car market and growth focused on its rental business, the impact on Lotte Rental's stock price will be limited."