[Edaily Reporter Kwon Oh Seok ] Hana Securities announced on the 2nd that it is maintaining its “Buy” rating on LOTTE rental(089860)and raising its target price from 44,000 won to 57,000 won.

Ahn Do-hyun, an analyst at Hana Securities, stated, “The Fair Trade Commission has approved the acquisition of LOTTE rental by TPG (a U.S.-based private equity firm). The entire 61.2% stake held by Hotel Lotte and Busan Lotte Hotel is scheduled to be sold to TPG,” he explained, adding, “The sale price is 59,000 won per share, bringing the total sale proceeds to 1.3 trillion won. It is understood that TPG plans to pay the entire sale price using its own capital.”
He continued, “The only aspect that will change following the change in LOTTE rental’s major shareholder is shareholder returns. LOTTE rental’s position as the top player in the car rental market is expected to remain solid, and profitability and cash flow based on this position will be stable,” adding “While the car rental business is sensitive to interest rates, LOTTE rental has strong pricing power, diverse debt financing options such as corporate bonds, and limited annual debt rollovers; therefore, concerns about profitability even during periods of high interest rates are limited,” he elaborated.
Analyst Ahn noted, “The area expected to change is the level of shareholder returns. The 2026 EPS (earnings per share) forecast is 3,623 won, and it is expected that the majority of this will be allocated to dividends. “In the case of LOTTE rental, since the company uses debt to purchase vehicles—which are operating assets—it has ample capacity to pay dividends,” he said, adding, “We forecast a level significantly higher than the existing dividend payout ratio (a target of returning at least 40% of net income to shareholders).”
He added, “We are raising our target price to reflect the outlook for an increased dividend payout ratio following the change in LOTTE rental’s major shareholder,” noting, “The company is significant not merely as a car rental firm but also as the nation’s largest holder of vehicle data; it is time for the market to reevaluate its new growth strategy and dividend policy.”