"LOTTE rental Strengthens Market Position, Q3 Earnings Seen Improving" - Daishin Securities

[Financial News] Daishin Securities said LOTTE rental is likely to expand its presence in the domestic car rental market and improve profitability. It maintained its investment rating of "Buy" and its target price of 60,000 won.
Analyst Park Kang-ho said on the 1st that investment expansion and business restructuring are expected to accelerate after global private equity firm TPG became LOTTE rental's largest shareholder.
TPG has said it plans to develop the company into a comprehensive rental solutions provider spanning both short- and long-term rentals, based on LOTTE rental's auto platform and its car-sharing service, Greencar.
Park also pointed to expanded direct sales of used cars and maintenance, repair, and overhaul (MRO)-linked services as factors that could lift LOTTE rental's long-term profitability.
He also said possible changes in competitors' ownership structures could work in LOTTE rental's favor.
Affinity Equity Partners, the largest shareholder of SK Rent-a-Car, which ranks second in the domestic car rental market, had sought to acquire LOTTE rental, but the deal fell through after Merger Review blocked it.
Park said, "If Affinity moves to sell its SK Rent-a-Car stake after the failed bid for LOTTE rental, LOTTE rental's standing in the market could be strengthened relatively."
He also forecast that earnings in the third and fourth quarters will improve, supported by the peak season for short-term rentals and a higher share of long-term used-car rentals. Revenue is projected to reach 790 billion won, a quarterly record, while operating profit is estimated at 93.3 billion won, the highest since the third quarter of 2022.
[email protected] Lee Jeong-hwa Reporter