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Lotte Rental’s IPO targets corporate sustainability

By Anna J. Park annajpark@koreatimes.co.kr

Ahead of its initial public offering (IPO) plan, Lotte Rental said it will take a modest approach to avoid overvaluation.

With its offering price range set between 47,000 won and 59,000 won, the firm aims to raise up to 850 billion won through the IPO. Based on its offering prices, the maximum level of the market cap is around 2.1 trillion won.

Market watchers view that the corporate valuation was on the modest side, as it shunned comparisons with foreign businesses having high values, while raising the discount rates for the new stock prices. Such an approach showed a contrast with other recent IPO candidates that aimed to maximize their corporate values in the IPO process.

During an online press conference on Monday, Lotte Rental CEO Kim Hyun-soo said the capital raised through the IPO will be spent on upgrading its high-priced assets that will be rented to customers, as well as on building effective mobility platforms.

“As a leader of the rental industry, the company has provided various rental services for the goal of improving customers’ quality of life,” CEO Kim said during the press conference. “With the KOSPI listing, the company aims to lead the market as the leader of future

mobility platforms.”

Lotte Rental claims about 22 percent of the country’s rental vehicle market as of the first quarter, keeping the top position in the market since the company started the car rental service back in 1989. The firm provides comprehensive rental services for various types of assets, ranging from rental cars and car sharing services to office appliances and heavy machinery.

The company reports an operating profit of more than 10 percent from the general rental market, and the firm has continued to expand the scope of rental products it provides. The company is also active in Vietnam and Thailand.

Based on its stable business portfolio, Lotte Rental reported an annual revenue of 2.25 trillion won ($1.95 billion) in 2020. The company recorded a quarterly revenue of 589 billion won in the first quarter, along with a net profit of 18.6 billion won. This is an 8.7 percent increase of year-on-year growth in quarterly revenue and a 144.7 percent growth in net profit compared to the first quarter of last year.

Korea Investment &Securities and NH Investment &Securities are the lead underwriters of the process, and the stock will be available to the public in mid-August.

Finance

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2021-08-03T07:00:00.0000000Z

2021-08-03T07:00:00.0000000Z

https://ktimes.pressreader.com/article/281625308347462

The Korea Times Co.