"Travel sentiment weakened by fuel surcharges and exchange rates"... Hanatour target price cut

[Financial News] Daol Investment & Securities lowered its target price for Hanatour on the 18th from 42,000 won to 37,000 won, reflecting weak demand resulting from higher fuel surcharges and other factors. The brokerage maintained its "Buy" rating.
Kim Hye-young, an analyst at Daol Investment & Securities, said, "Package-tour sentiment has weakened and profitability has continued to decline amid rising fuel surcharges and persistently high dollar and euro exchange rates." She added, "The timing of a recovery in outbound travelers and gross merchandise value (GMV) remains uncertain because of uncertainty surrounding external factors beyond the company's control."
She added, "It is positive that online and mid- to high-priced package sales remain solid despite the various headwinds," but noted, "We lowered our target price to reflect the decline in earnings."
Revenue this year is expected to reach 562.9 billion won, while operating profit is projected at 45.8 billion won. These figures represent year-on-year declines of 4.1% and 20.6%, respectively.
Kim said, "The fuel surcharge will be set at Tier 23 in October, up nine tiers from Tier 14 in August." She added, "The impact of reduced demand for long-haul routes caused by higher fuel surcharges in the second quarter continues, and the timing of normalization remains uncertain."
She explained, "Last year, Chuseok fell in the fourth quarter and the holiday period lasted seven days, whereas this year it falls in the third quarter and the holiday period is relatively shorter, so demand for long-haul travel is expected to decline." She added, "The dollar and euro exchange rates fell by around 10% from mid-June before resuming an upward trend, which is weighing negatively on travel sentiment."

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