[Click eStock] "HanaTour, Recovery Speed Is a Concern"…Target Price ↓

[Asia Economy Reporter Lee Jung-yoon] Yuanta Securities downgraded the target price of Hana Tour from 110,000 KRW to 70,000 KRW on the 3rd, citing a slow pace of travel recovery. However, the investment rating of "Buy" was maintained.

Hana Tour's operating revenue in the second quarter of this year recorded 21.6 billion KRW, a 143.7% increase compared to the same period last year, with an operating loss of 33.7 billion KRW. Operating revenue exceeded consensus estimates, but operating profit fell short. However, it is evaluated that it is difficult to assign significant meaning to these results.

Researcher Lee Jin-hyeop of Yuanta Securities explained, "The total number of passengers sent in the second quarter increased by 980% year-on-year to about 65,400, which is about 5% of the 2019 level. The number of package tour passengers increased by 4,661% year-on-year to 22,700, which is about 3% of the 2019 level."

The package deposit per person was about 1.78 million KRW. This is approximately 1 million KRW higher than the pre-COVID-19 deposit per person of around 700,000 KRW, which is attributed to the effect of increased travel prices and the still high proportion of B2B (business-to-business) packages.

The researcher said, "Since March, Hana Tour's stock price has shown a sluggish performance, falling about 40%. This is judged to be due to a slower recovery than market expectations rather than damage to Hana Tour's investment points themselves, such as travel industry recovery and leverage effects from restructuring."

He added, "While macro factors such as rising prices do burden travel demand, the main reasons for the actual travel recovery falling short of market expectations appear to be the still unnormalized airline routes and various entry and exit conditions. The number of package tour passengers in July, expected to mark the start of recovery in the peak travel season, was only 24,000, about 10% of the 2019 level, so the turnaround in performance is inevitably delayed."

He continued, "It is positive that the slow recovery in demand is partially offset by strong prices. It is expected that the speed of performance turnaround will accelerate gradually with the expansion of routes and the allowance of free entry and exit."

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