[Click eStock] "'Worst Boryeokogae' Hanatour, Restructuring Business Structure Through Asset Sales"

Meritz Securities Report

[Asia Economy Reporter Minji Lee] Meritz Securities stated on the 3rd that Hana Tour is overcoming its final hardship through funds secured by asset sales, and that additional stock price increases are possible after the COVID-19 pandemic.

Hana Tour's consolidated sales in the fourth quarter were 6.9 billion KRW, down 95% compared to the same period last year. Operating losses continued at 25.5 billion KRW. Last year's consolidated sales and operating losses were recorded at 109.6 billion KRW and 114.6 billion KRW respectively, showing a difference from the revised performance forecast in December last year (sales 141.4 billion KRW, operating loss 141.4 billion KRW).

The difference in performance forecasts was due to some subsidiaries' results being recognized as discontinued operations. Star Shop and SM Duty Free fall under this category. SM Duty Free's sales and operating losses last year were 100 billion KRW and 6.6 billion KRW respectively, while Star Shop's sales and operating losses for the same period were 4.7 billion KRW and 4.9 billion KRW. Researcher Hyojin Lee of Meritz Securities said, “The cumulative sales and losses up to the third quarter appear to have been deducted in the fourth quarter.”

Hana Tour recently announced a decision to sell tangible assets. The stake in Hana Tour within the headquarters building is being disposed of for 94 billion KRW. The company is expected to secure cash liquidity through asset sales. It is anticipated that the headquarters building and Mark Hotel will be sold, with the headquarters building sale appearing to precede. Researcher Lee said, “Cash is inevitably needed for future restructuring aimed at workforce efficiency,” adding, “It is expected that about 200 billion KRW will be secured through real estate sales.”

The travel industry is currently expected to be overcoming its last hardship before recovery. The funds secured through asset sales are expected to play an important role in restructuring the travel business to suit the post-COVID-19 situation. The researcher added, “It is time to open up the possibility of stock price increases in the travel industry ahead of the unprecedented pent-up demand, rather than the current worst situation.”

This content was produced with the assistance of AI translation services.