Flying Solo 'Norang Pungseon'

Contrasting with Variant-Driven Travel Slump... Effectiveness of Contactless Customized Travel Platform
Efforts to Maximize Shareholder Value Also Effective

[Asia Economy Reporter Gong Byung-sun] Although the COVID-19 Delta variant is spreading, Norangpungseon’s stock price is on the rise. The launch of an online travel platform suitable for the contactless era and efforts to enhance shareholder value are believed to have strengthened the stock price.

According to the Korea Exchange on the 20th, as of the 19th, Norangpungseon closed the market at 31,550 won, down 3.81% (1,250 won) from the previous day. However, since the 6th, when the nationwide number of COVID-19 confirmed cases exceeded 1,000, Norangpungseon’s stock price has actually risen by 3.27%. During the same period, major travel agencies such as Hana Tour and Modetour fell by 4.90% and 7.77%, respectively, showing a different trend from the travel industry’s overall sluggishness.

The reason Norangpungseon’s stock price rose despite the social distancing level being raised to level 4 is due to its business structure, which incurs significantly lower fixed costs compared to other companies. As of 2018, the proportion of direct sales in Norangpungseon’s sales channels reached 78.6%. In contrast, Modetour’s agency sales accounted for 65%. Researcher Lee Jong-won of Sangsangin Securities explained, “Major travel agencies such as Hana Tour and Modetour operate mainly through agencies,” adding, “Norangpungseon increased the proportion of direct sales, which allowed it to reduce agency commissions.”

Improving the business structure to suit the contactless society is also a positive factor. On the 14th of last month, Norangpungseon launched an online travel platform called ‘OTA.’ This platform, focused on independent travel, supports booking and payment for flights, hotels, and activities all at once. Results are already showing. As of the 20th of last month, the number of new Norangpungseon subscribers increased by more than 50% compared to the same period the previous month, and daily visitors increased by about 800%.

Efforts to enhance shareholder value also influenced the stock price. On the 7th, Norangpungseon carried out a 200% bonus issue, allocating 2 shares per existing share to maximize shareholder value and increase the number of circulating shares. Although the number of circulating shares on the 7th was 301,992, trailing Modetour’s 504,848 shares, by the 19th, it surpassed Modetour (168,057 shares) with 177,967 shares. Researcher Lee said, “As the number of circulating shares gradually increases, accessibility for institutional investors will also improve,” adding, “Considering the resolution of COVID-19, shareholder value is expected to gradually increase.”

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