Hana Securities said on the 4th that, thanks to the benefits of the "Japan entry quota," simultaneous growth could emerge in Japan and China for Hanatour. It maintained its investment rating of Buy and raised its target price by 6% to 67,000 won. Hanatour's previous closing price was 46,000 won.
Hana Securities forecast a rebound in the number of package travelers based on the strong fourth-quarter results last year and a high base effect.
Lee Gi-hun, an analyst at Hana Securities, said, "With demand already running higher than expected from the first quarter, simultaneous growth could appear in Japan and China thanks to the benefits of the 'Japan entry quota.'"
In particular, it analyzed the stock as undervalued, with this year's estimated price-earnings ratio (PER) at only 10.
In the fourth quarter last year, revenue and operating profit came in at 175.2 billion won and 27.4 billion won, respectively. That marked the largest quarterly operating profit and was in line with consensus.
The analyst said, "Package travelers numbered 605,000, and the average selling price (ASP) was 1.09 million won. With the golden holiday in October, the number of travelers grew 15%, and performance was quite strong."
This year's results were projected to be better. This year's number of package travelers was forecast to grow by about 10%. That is a slight upward revision from the previous 8.5%.
The analyst said, "There were many domestic and external negatives last year, and despite the golden holiday, tough conditions persisted. But travel invariably generates deferred demand, so a sharp rebound is expected this year," adding, "From the first quarter, the magnitude of the rebound is likely to come in higher than expected."
In particular, considering that Hanatour has strengths in Japan, growth of around 10% to 15% was expected despite Southeast Asia's weakness.
The analyst said, "Given the high base effect in the second and third quarters last year, average growth of around 15% is expected in the second and third quarters this year," and projected full-year operating profit at 71.3 billion won, up 24% from a year earlier.