[Click eStock] "K Car, the Biggest Beneficiary in the Used Car Market"

[Asia Economy Reporter Ji Yeon-jin] Yuanta Securities announced on the 9th that it maintains a buy investment opinion and a target price of 35,000 won for K Car, expecting high growth exceeding 30% next year due to the creation of a favorable business environment.

An Joo-won, a researcher at Yuanta Securities, said, "Recently, U.S. used car companies are also expanding online sales and leading the market, and since their stock prices are performing well, K Car's stock price is also expected to rise accordingly." He added, "The current stock price is valued at about 13 times based on the expected 2022 earnings, which is attractive in terms of valuation." This year, sales are expected to increase by 40.3% year-on-year to 1.9 trillion won, and operating profit is expected to rise by 98.9% to 78 billion won.

K Car's sales in the third quarter of this year reached 490 billion won, up 46.3% compared to the same period last year, and operating profit recorded 18.4 billion won, an increase of 36.1%. E-commerce sales grew by 97% year-on-year, leading the company's overall expansion, and the sales proportion rapidly rose to 42%. However, the gross profit margin slightly declined because the recent used car prices surged sharply in a short period, raising the purchase cost. In response to such price fluctuations, K Car plans to raise sales prices and improve the gross profit margin. Researcher An said, "This performance highlights that online sales of used cars are the trend and the sales strength of the country's top company."

The domestic used car market formed a scale of 39 trillion won as of 2020 and is expected to grow at an average annual rate of 5%, reaching 50 trillion won by 2025. Currently, transactions between individuals account for more than 50%, the largest share, but since non-face-to-face transactions have been preferred after COVID-19, demand for companies without uncertainty about vehicle condition and quality is increasing. Therefore, B2C transactions by dealers are expected to increase in the future. It is forecasted that companies like K Car, which take responsibility for quality and have activated online channels for quick response, will greatly benefit.

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