Eugene Securities evaluated on the 16th that K Car, a used car distribution company, has a high dividend yield and dividend growth potential. Eugene Securities maintained an 'overweight' investment opinion on K Car and set a target price of 20,500 won.
Lee Jae-il, a researcher at Eugene Securities, projected that K Car's annual cash dividend this year will be 1,200 won per share. K Car has been distributing 300 won per share each quarter since the second quarter of last year.
The researcher noted, "Based on K Car's closing price yesterday (16,890 won), the annual dividend yield is 7.1%" and added, "It is expected that as net profit increases compared to last year, the quarterly dividends might be raised in the second half of the year." He also remarked, "If separate taxation on dividends is introduced, the attractiveness as a high dividend stock and dividend growth stock is expected to stand out."
The researcher estimated that K Car recorded an operating profit of 18 billion won in the second quarter (April to June) of this year, which is 0.6% lower than the same period last year. Transactions in the used car market have declined, causing a slowdown, but he explained that there are signs of improvement this month.
The researcher stated, "K Car is actively utilizing its own channels (distribution networks), which have low purchase commissions, and maximizing productivity per employee to achieve both structural growth and improved profitability. Additionally, it plans to increase service revenue by introducing consumer-to-consumer (C2C) transaction mediation and a long-term warranty program."