[Click eStock] "Both Rental and Used Car Sales Are Strong... SK Rent-a-Car Keeps Running in 3Q"

Strong Demand for Short-Term Rentals in Peak Season... Positive Trend in Used Car Prices

[Asia Economy Reporter Minwoo Lee] SK Rent-a-Car is expected to continue its solid performance in the third quarter of this year. Both rental and used car sales are maintaining strong momentum, with favorable performance growth expected throughout the second half of the year.

On the 2nd, Hyundai Motor Securities maintained its 'Buy' rating and target price of 22,000 KRW for SK Rent-a-Car, citing these factors. The closing price on the previous day was 12,700 KRW.

SK Rent-a-Car is expected to deliver strong results in the third quarter following the previous quarter. On a consolidated basis, sales are estimated at 278.1 billion KRW and operating profit at 30.5 billion KRW, representing increases of 30.2% and 39.1% respectively compared to the same period last year. The continued strength in long-term rentals, along with increased short-term rental demand centered around Jeju Island during the peak season, is expected to drive solid sales growth. Profitability in the short-term rental and used car sales segments has significantly improved, leading operating profit to grow at a rate exceeding sales growth.

This upward trend is expected to continue into the fourth quarter. The surge in domestic travelers to Jeju Island is anticipated to boost the short-term rental segment’s operating performance. The used car sales segment is also expected to maintain a steady trend due to the sustained strength in long-term rentals and robust used car prices.

As synergy effects from the integrated corporation materialize, the low base effect from last year is also positively contributing to improved performance momentum. In the rental segment, the integration of SK Rent-a-Car and AJ Rent-a-Car is expected to increase both registered and operating vehicles by the end of this year. Park Jong-ryeol, a researcher at Hyundai Motor Securities, stated, "Although there are concerns about performance slowdown due to the spread of the COVID-19 Delta variant, solid performance momentum continues. With ongoing vaccination efforts, social distancing measures are expected to be eased under 'with COVID' policies by early next month at the latest, which bodes well for the business environment."

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