DAOL Investment & Securities said on the 16th that a rebound is expected for Hanatour in the fourth quarter. It analyzed that demand will stand out through the end of the year, when visa-free entry to China expires, along with a preference for long-haul routes during the long Chuseok holiday. It raised the target price to 70,000 won from 65,000 won and maintained its buy recommendation.
Hanatour's total gross merchandise value (GMV) in the first and second quarters of this year was 580.5 billion won and 490.8 billion won, down 5.4% and 6.2%, respectively, from a year earlier. Revenue also fell 8.1% and 8.9% over the same periods, showing weak results in the first half of the year.
Kim Hye-young, an analyst at DAOL Investment & Securities, said, "The declines in GMV and revenue appear to be due to political uncertainty that has continued since December last year and weakened travel sentiment following an aircraft accident," and noted, "A rebound was possible during the third-quarter vacation season, but reservations likely fell in July on concerns about a major earthquake in Japan."
However, travel sentiment is expected to show a clear recovery starting in the fourth quarter. This year's Chuseok holiday lasts seven days, and assuming time off through Oct. 10, the break extends to a total of 10 days. Compared with six days in 2023 and five days in 2024, it is the longest holiday period in recent years.
Kim said, "During this Chuseok holiday, demand for overseas travel and preference for long-haul routes could rise," and explained, "Because the visa-free policy for China implemented in Nov. last year runs only through the end of this year, demand may concentrate."
Increased sales of mid- to high-priced package tour products are also a positive. As of the second quarter, mid- to high-priced products accounted for 53% of total GMV, an all-time high.
Hanatour plans to use about 50% of consolidated net profit as shareholder return funds from this year through 2027. It plans a consolidated payout ratio of 30%–40% and share repurchases and cancellations of 10%–20%.