Hana Tour Soars on Strong Performance... New Record High Achieved

Stock Prices Rise 29.2% This Year
Shareholder Returns Resume After COVID-19 Pandemic Ends

This year, Hana Tour's stock price has been steadily trending upward. With improved earnings prospects and growing expectations for shareholder returns, the stock has been hitting new 52-week highs day after day.

According to the financial investment industry on the 6th, Hana Tour's stock price has risen 29.2% since the beginning of this year. Considering that the KOSPI fell 2.4% during the same period, this represents a return exceeding the market by more than 30 percentage points.

In the third quarter of last year, Hana Tour recorded sales of 126.7 billion KRW and an operating profit of 13.2 billion KRW. Compared to the same period the previous year, sales increased by 238%, and operating profit turned positive. Notably, the operating profit exceeded the market expectation of 10.8 billion KRW.

There are also forecasts that the fourth-quarter results met market expectations. Bukook Securities estimated that Hana Tour achieved sales of 126.5 billion KRW and operating profit of 12.3 billion KRW in the fourth quarter of last year. As the number of travelers going overseas through Hana Tour’s package products increases, this year’s performance is expected to be strong as well. Lee Jung-gyu, a researcher at Bukook Securities, explained, "This year will be the first year of full earnings normalization after the COVID-19 pandemic," adding, "With increased sales of short-distance package travel products, the annual number of package travelers is expected to increase by more than 55% compared to the previous year." He further added, "This year, there is also a high possibility of increased sales of medium- to long-distance packages, supported by the normalization of air infrastructure in Europe and the United States and the special demand from the Paris Olympics."

Hana Securities estimated that the annual number of package travel customers sent out by Hana Tour this year will be 2.18 million. Lee Ki-hoon, a researcher at Hana Securities, analyzed, "The expected operating profit for this year is 62.6 billion KRW, an 83% increase from last year," and added, "Considering the recovery speed in January, there is ample room for better-than-expected performance."

Considering the impact of exchange rates and the activation of overseas travel among the elderly population, the outlook that Hana Tour will achieve favorable results this year is gaining strength. Ji In-hae, a researcher at Shinhan Investment Corp., explained, "The won-dollar exchange rate declined after peaking, stimulating overall overseas travel demand," and added, "It appears that overseas travel among the elderly population, who mainly use package products, has become full-fledged." He emphasized, "Due to the winter peak season effect, Hana Tour’s package travelers in January reached 200,000, a figure close to the pre-COVID-19 pandemic average."

Dividend expectations, which were previously absent, are also supporting the stock price increase. Hana Tour announced at the end of last year that it plans to pay dividends of 30-40% of annual consolidated net income through 2025. The company explained that it is expanding the dividend scale considering the lack of shareholder returns from 2020 to 2022 due to the poor travel industry conditions caused by COVID-19. It also added that the 2023 fiscal year dividend will be paid as a special dividend. On December 1st last year, an extraordinary general meeting of shareholders was held to approve the reduction of capital reserves. Part of the 140 billion KRW transferred from capital reserves to retained earnings will be used as dividend funds. The Yeouido securities market expected the dividend per share to reach approximately 3,600 to 4,000 KRW as of the end of last year.

Meanwhile, when the domestic private equity fund (PEF) operator IMM Private Equity (PE) participated in Hana Tour’s rights offering in 2019, the new share price was 55,500 KRW. IMM PE additionally acquired new shares by participating in the shareholder allocation rights offering in 2022. At that time, the new share issuance price was 49,800 KRW. With Hana Tour’s stock price exceeding 67,000 KRW and shareholder returns resuming, IMM PE is also expected to escape the "COVID-19 nightmare."

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