[Click eStock] “SK Rent-a-Car, Growth Driven by Perception and Structural Changes”

Samsung Securities "SK Rent-a-Car Target Price Set at 18,000 Won"
Cost Reduction Expected if Transition to Electric Vehicles Occurs

[Asia Economy Reporter Gong Byung-sun] There is a forecast that SK Rent-a-Car will grow in line with the public's changing perception of ownership and the eco-friendly trend. Samsung Securities newly issued a target price of 18,000 KRW and a 'Buy' investment rating for SK Rent-a-Car.

According to Samsung Securities on the 8th, SK Rent-a-Car showed growth last year. The number of rental cars registered by SK Rent-a-Car nearly doubled from 77,000 units in 2018 to 130,000 units last year. Lee Kyung-rok, a researcher at Samsung Securities, said, "Sales are expected to increase through the succession of long-term rental contracts of SK Networks," and added, "An increase in individual rental car demand is also expected due to changing perceptions of ownership."

Improvement in the profit structure due to the transition to eco-friendly vehicles is also anticipated. SK Rent-a-Car is preparing related products in response to the increasing demand for electric vehicles and plans to establish an electric vehicle-exclusive site in Jeju City to secure market dominance. The researcher explained, "In the case of electric vehicle rentals, there is competitiveness compared to existing internal combustion engine vehicles," and "Electric vehicle management costs are about 50% of those for internal combustion engine vehicles, which will reduce vehicle management costs." In the mid to long term, sales margins may improve due to structural changes arising from the transition to eco-friendly vehicles.

Used car sales margins are also expected to improve. The sharp rise in the US Consumer Price Index (CPI) in April was due to the increase in used car prices. Due to semiconductor supply shortages delaying new car production, demand for used cars increased. Domestically as well, used car demand has been rising since the fourth quarter of last year. Therefore, improvements in SK Rent-a-Car's used car resale rate are expected to lead to improved operating profits.

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