[Click e-Stock] Hana: "Lotte Rental fundamentals solid... target price raised to 38,000 won"

On February 11, Hana Securities raised its target price for Lotte Rental to 38,000 won. The brokerage assessed that although short-term volatility may increase as new potential buyers emerge, the sale issue itself could serve as a catalyst for a re-rating as long as the company’s fundamentals remain solid.

Ahn Dohyun, an analyst at Hana Securities, stated in a report on Lotte Rental released the same day, "In 2026, along with a favorable trend in the core business, the timing will arrive for selling used rental cars, making it a year in which the company will continue to renew its record-high earnings."

In the fourth quarter of last year, Lotte Rental posted revenue of 726.4 billion won and operating profit of 79.3 billion won, falling short of the market consensus. Analyst Ahn explained, "Revenue and operating profit from the core rental car business increased by 3% and 36%, respectively, year-on-year and were solid, but profits from used car sales declined due to a decrease in the number of used rental cars sold," adding, "Even so, full-year operating profit in 2025 increased by 10% compared with the previous year, allowing the company to meet its guidance."

The Fair Trade Commission’s decision to reject Affinity’s acquisition of Lotte Rental has been interpreted as lowering the likelihood of both the sale of Lotte Rental and a business combination with SK Rent-a-Car. Analyst Ahn commented, "Separately from this, Lotte Rental’s credit rating and funding are based on the company’s stable cash flow, so its intrinsic corporate value remains unchanged," adding, "We will keep an eye on shareholder returns." Lotte Rental has set its final dividend for the 2025 fiscal year at 1,200 won per share, and has stated that it maintained the cash dividend at the previous year’s level in order to respond to potential early redemption demands on corporate bonds stemming from the possibility of a change in its largest shareholder.

He said, "As long as the fundamentals are solid, sale-related issues can also serve as a trigger for revaluation. When Affinity was pursuing the acquisition, it valued Lotte Rental at more than 2 trillion won," and on that basis he raised the target price to 38,000 won. The current market capitalization is approximately 1.2 trillion won.

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