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Photo = Yonhap news |
[Alpha Biz= Kim Sangjin] Daishin Securities announced that Hana Tour’s Q4 earnings are likely to fall short of market expectations due to a decline in average selling prices (ASP). The firm maintained its "Buy" rating and a target price of KRW 75,000. The stock’s previous closing price was KRW 54,700.
According to Daishin Securities, Hana Tour's Q4 revenue is projected to reach KRW 153.8 billion, a 28.6% year-on-year increase. Operating profit is estimated at KRW 12.2 billion, up 9.4% from the previous year.
The brokerage highlighted that despite being a low season, package travelers increased by 19% quarter-on-quarter in Q4, benefiting from the absence of headwinds such as the Tmon scandal and the Nankai earthquake. However, ASP is expected to decline by 12.4% year-on-year to KRW 954,000 due to an increased share of short-haul routes and intensified price competition.
Daishin Securities noted, “Investor sentiment has been dampened by events such as the December martial law declaration and the Muan Airport tragedy. Hana Tour has waived cancellation and change fees for all products using Jeju Air.” The canceled packages accounted for less than 2% of total sales, indicating a minimal impact on earnings.
Looking ahead, Daishin projected a 60% year-on-year increase in operating profit for 2024, driven by the elimination of one-off costs related to the Tmon and Nankai incidents and growth in China-centric package tours.
The report also highlighted Hana Tour's shareholder-friendly policies: “The company announced a dividend per share (DPS) of KRW 2,300 for 2024, significantly exceeding market expectations. With robust profit growth anticipated next year, dividend attractiveness is likely to increase further.”
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
