[Click eStock] "HanaTour, Q1 Earnings Expected to Fall Short... Target Price Raised"

[Asia Economy Reporter Hwang Yoon-joo] Hyundai Motor Securities maintained a 'neutral' investment rating on Hana Tour on the 12th, stating that operating losses are expected to continue, but raised the target price by 17% to 75,000 KRW.

Hyundai Motor Securities analyst Kim Hyun-yong stated, "The first-quarter earnings are expected to show sales of 13.6 billion KRW, a 94.8% increase compared to the previous year, but an operating loss of 25.2 billion KRW, indicating continued deficits."

Analyst Kim explained, "The estimated number of outbound travelers in the first quarter is 18,000, more than double compared to the same period last year, but this accounts for only 1.5% compared to the pre-COVID average," adding, "This is significantly lower than the approximately 7% recovery in the number of departures compared to before COVID."

He added, "Currently, departures are mainly for business trips, and in the case of travel, free travel (preferred by those in their 20s to 40s) is more common than package tours (mainly targeting those over 50). Package travel demand recovery is expected to be detected from the third quarter at the earliest, but only a 20% recovery of pre-COVID outbound travelers (quarterly basis) is expected by the end of this year, requiring an extremely conservative approach."

Hana Tour, the largest travel agency in Korea, switched to a full regular work system on the 1st. This marks 1 year and 6 months since the company implemented unpaid and paid leave for all employees except essential workers starting from April last year due to the COVID-19 pandemic. According to Hana Tour, about 1,100 employees out of 1,200, excluding those on leave such as parental leave, came to work that day. This normalization of work at Hana Tour is the first case among listed companies with more than 1,000 employees to transition to a 'With Corona' system. Employees are moving for afternoon work after finishing lunch at the Hana Tour headquarters in Gongpyeong-dong, Jongno-gu, Seoul.
Photo by Moon Honam munonam@

Analyst Kim forecasted, "From March to April, with the significant expansion of self-quarantine exemptions upon entry, the number of international flights has increased to 25% compared to pre-COVID levels. Accordingly, the current 7% recovery rate in outbound demand is expected to rise to 35% by the fourth quarter of this year."

He evaluated, "It is clear that overall travel demand is surging, but the market is expected to be centered on early adopters until this year."

Analyst Kim predicted, "With the recent 134.6 billion KRW rights offering, liquidity risk will be significantly reduced for about one to one and a half years."

He added, "A rebound in package tour outbound travelers due to the recovery in the number of departures seems possible only from the third quarter at the earliest, and as confirmed in the rights offering, the financial condition requires continuous external liquidity procurement."

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