[Click eStock] "Socar, Continuous Capability Enhancement and Turnaround Expected in Second Half of Next Year"

On the 30th, DS Investment & Securities maintained a buy rating and a target price of 29,000 KRW for Socar, stating that its capabilities as a comprehensive mobility platform are expected to continue strengthening.

This year, Socar's revenue is projected to increase by 2.1% year-on-year to 405.8 billion KRW, with an operating loss of 18.3 billion KRW. Jo Dae-hyung, a researcher at DS Investment & Securities, explained, "This is due to a reduction in used car sales volume," adding, "The reduction in used car sales volume is aimed at expanding Socar Plan, through which an increase in the lifetime value (LTV) per vehicle is expected, along with an improvement in profit margins."

He continued, "With the expansion of Socar Plan vehicles, a rise in utilization rates is also expected through flexible asset movement between short-term sharing and plans," and "In the second half of next year, when the plan is expected to be fully established, the average utilization rate is anticipated to be maintained at around 38%."

The deferred revenue from used car sales is expected to normalize starting from the second half of next year, leading to a significant turnaround at that time.

Based on its overwhelming market dominance in the car-sharing market, collaboration with Naver is also expected to accelerate. Socar's vehicle inventory rental and mobility platform will be integrated into Naver Map, which has approximately 15 million monthly active users. Starting with the sale of parking tickets for Modu Parking in the fourth quarter, the partnership with Naver is expected to expand, and the resulting channeling effect is anticipated to drive growth in car-sharing.

Cost reductions through technological developments such as Socar Pay and AI call centers are also steadily progressing. It is estimated that payments made via Socar Pay account for about 40% of total transaction volume, which could reduce the electronic payment gateway (PG) fee rate from the mid-2% range to below 1%.

Researcher Jo stated, "The launch of Socar Plan and the associated aggressive marketing expenses may appear quite different from the plans presented at the beginning of the year," but added, "However, there is no change in Socar's long-term vision to innovate the inefficiencies of vehicle ownership."

He further noted, "When investments for Socar 2.0, including the plan, are completed and the monetization of businesses under preparation such as the Fleet Management System (FMS) becomes visible, a re-rating will be necessary."

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