Daishin Securities has maintained a "buy" rating for Lotte Rental and raised its target price to 60,000 won ahead of the company's acquisition by private equity firm TPG.
In a report released on August 20, analyst Park Kang-ho noted that the largest shareholder of Lotte Rental has changed from Hotel Lotte and Busan Lotte Hotel to TPG, which holds a 61.17% stake.
Park stated, "The acquisition price of 59,000 won per share is considered a premium price for the new major shareholder. Given the company's revenue and profit growth, the potential for the stock price to exceed the offering price is high." He added that at the 59,000 won price, the price-to-earnings ratio (P/E) for 2027 would be 10.2 times, and the price-to-book ratio (P/B) would be 1, indicating an attractive valuation.
Regarding the stock price, he mentioned, "Due to the change in the largest shareholder, Lotte Rental's stock price has risen 72.9% from a low of 27,100 won on June 26 to the closing price on August 19. We believe further increases are possible, prompting us to raise the target price by 13.2% to 60,000 won."
Looking ahead, Park highlighted the potential for increased dividends, stating, "Once the acquisition is finalized, we expect dividend expansion in 2027 based on the company's record performance in 2026." He added that the first year post-acquisition could see dividends raised, benefiting both investors and the new major shareholder.
Additionally, he noted that TPG, as the second-largest shareholder of Kakao Mobility, is likely to seek synergies in future mobility platforms, including shared economy and autonomous driving solutions. Even considering the return of investment from Kakao Mobility, collaboration opportunities with Lotte Rental are expected to be explored.
* This article has been translated by AI.
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