[Click eStock] "K Car, Leading Position in Used Car Market... Good Investment Opportunity"

Q3 Sales Increase, Operating Profit Slightly Decreases
Strong Position Maintained Despite Entry into Large Corporate Market
Target Price Lowered but Considered a Good Investment Opportunity

Heungkuk Securities on the 26th adjusted the target price for K Car downward from 18,000 KRW to 17,000 KRW, reflecting an appropriate discount rate. The investment opinion 'Buy' was maintained. K Car's closing price on the previous trading day was 12,580 KRW.

According to Heungkuk Securities, K Car, the largest certified used car specialist company in Korea, continued its sales growth in the third quarter of 2024, but operating profit slightly decreased due to one-time expenses. Q3 sales reached 579.7 billion KRW, up 9.7% year-on-year, while operating profit was 17.1 billion KRW, down 7.1%, showing a slight slowdown. Total units sold were 39,000, an 8.2% increase compared to the previous year, and the average selling price (ASP) hit a record high of 17.84 million KRW.

The decline in operating profit is analyzed to be the result of one-time costs related to inventory adjustments of electric and hybrid vehicles.

The company expects to maintain a favorable performance trend in Q4 as provisional data shows that October sales volume increased by 20-30% compared to the same month last year. Through this, the full-year performance for 2024 is also expected to show steady growth.

K Car has built trust with customers by providing a 3-day responsibility refund policy and transparent pricing based on an integrated online and offline platform. In particular, it has solidified its leading position in the domestic used car market through the world-class inventory management system, sales period management, and improvements in various purchasing channels.

Choi Jong-kyung, a researcher at Heungkuk Securities, said, "Although the target price has been lowered, considering K Car’s strong performance and a high dividend yield of around 10% on an annualized basis, it could be a good investment opportunity." He added, "Despite the entry of large corporations into the market and structural changes in the used car market, K Car’s stability remains unshaken, and it is highly evaluated as the strongest player in the used car market."