[Click eStock] "K Car, Used Car Prices Strong... eCommerce Sales to Surpass Half"

[Asia Economy Reporter Lee Jung-yoon] Samsung Securities maintained its buy rating and target price of 50,000 KRW for K Car on the 15th, stating that the company's Q4 sales and operating profit last year met estimates.

K Car's Q4 sales last year rose 48.8% year-on-year to 501.8 billion KRW, and operating profit increased 88% to 14.2 billion KRW. Samsung Securities analyzed that although sales volume decreased compared to the previous quarter due to the off-season effect in Q4, overall sales increased due to strong used car prices and early sales of high-end vehicles. However, it explained that the cost of goods sold ratio rose due to long-term inventory clearance and the reflection of higher used car purchase prices, resulting in a 10% decline in the gross profit margin (GPM).

Previously, Samsung Securities identified factors that could affect K Car's stock price as ▲Q4 performance ▲entry of automakers into the used car market ▲partnerships with related companies, and evaluated that the Q4 performance met estimates. Furthermore, even if automakers enter the used car market, expected to be decided after March this year, the impact on K Car is expected to be minimal due to automakers' insufficient establishment of online-offline linked services, differences in vehicle purchasing capabilities, and self-imposed market share restrictions. The exclusive partnerships with imported car dealers and domestic mobility platforms were also positively evaluated.

Researcher Lee Kyung-rok of Samsung Securities said, "We lower the operating profit forecast by 10% from the previous estimate to 86 billion KRW on sales of 2.3 trillion KRW this year due to a decline in GPM caused by rapid price increases and increased advertising expenses," but added, "The e-commerce sales ratio in 2022 is estimated to exceed 52%, surpassing the majority, and the higher GPM of e-commerce compared to offline channels may partially offset the margin decline caused by the rapid rise in used car prices."

He continued, "With the addition of six offline branches and one auction house this year, we expect not only external growth but also continued online-offline linkage, benefiting from the online purchasing trend."

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