Shinhan Investment Corp has lowered its target price for Hana Tour to 45,000 won, citing prolonged burdens from fuel costs and the impact of ongoing conflicts. The investment recommendation remains a 'buy.'
In a report released on the same day, analyst Ji In-hye of Shinhan Investment Corp noted, "Regionally, while short trips during the Chuseok holiday increased by 12% for Japan and China, long-distance travel, which faces significant fuel cost burdens, continues to struggle."
Regarding third-quarter performance, Ji stated, "We expect sales to reach 128.8 billion won and profits to hit 6.4 billion won, surpassing market expectations. The total number of travelers is projected at 945,000, with free independent travel (FIT) growing by 15%, driving overall demand. However, high-margin package tours (PKG) are expected to see a decline, with numbers falling below 400,000 for the first time in a quarter, marking an 11% decrease."
Despite the challenging business environment, Ji emphasized, "Profitability has been defended as much as possible. The increase in the proportion of mid-priced sales has helped maintain a high average selling price (ASP), and contributions from our Japanese subsidiary have expanded. Additionally, cost control has been aided by the expansion of online and mobile channels and the integration of artificial intelligence (AI)."
Ji concluded, "We have demonstrated proactive improvements through our results, and if demand recovers, we can expect significant profit elasticity. Considering the potential for shareholder returns, there is room for upside."
* This article has been translated by AI.
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