[Click e-Stock] "Socar Expected to See Significant Profitability Improvement in Second Half"

On May 14, DS Investment & Securities stated that Socar is expected to achieve a significant improvement in profitability in the second half of the year through new services launched in the first half. However, reflecting the overall decline in the valuation of mobility companies, the target stock price was lowered to 22,000 KRW.

In the first quarter of this year, Socar recorded sales of 131.5 billion KRW and operating profit of 1.4 billion KRW. Sales increased by 45.2% compared to the same period last year, and operating profit turned positive, exceeding market expectations.

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Cho Daehyung, a researcher at DS Investment & Securities, explained, "We believe the surplus is the result of asset reallocation aimed at improving efficiency, as well as the strategic adjustment of short-term car sharing, Socar Plan, and used car sales in response to supply and demand conditions."

In January, Socar launched an airline ticketing service in partnership with Naver Air. The company continues to expand services to create new demand for customers purchasing airline tickets through Socar, such as airport transfer services and bundled products with car sharing. The number of car sharing users among airline ticketing customers increased 19-fold compared to January, and 39.3% of converted customers became new car sharing members, achieving meaningful results.

Researcher Cho stated, "New services, asset reallocation, and promotions are expected to lead to increased demand in the second half of the year," and added, "Although there may be one-off costs reflected in the first half, we expect a significant improvement in profitability in the second half."

Researcher Cho maintained a 'Buy' investment opinion, noting that Socar continues to hold a unique position in its sector. However, reflecting the overall decline in valuation among similar mobility companies and lowering the target multiple, the target stock price was reduced to 22,000 KRW.

Researcher Cho commented, "We believe Socar's unique position in innovating the inefficiency of vehicle ownership, including Socar Business, which utilizes corporate vehicles through Socar, remains unchanged."

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