Lotte Rental makes money by renting out and managing cars. Its mainstay is long-term auto leasing to companies and individuals over multi-year terms, complemented by short-term auto rental and a used-car resale business that sells off lease-returned vehicles through auctions and a platform. The biggest event this year was the withdrawal of a rights offering on May 21: an approximately ₩219.9 billion third-party allotment issue that had been a condition of the sale to the Affinity consortium was withdrawn after the antitrust regulator rejected the business combination, removing the roughly 20% dilution pressure on existing shareholders, while first-quarter operating profit rose nearly 25%. What stands out lately is that, as the country's No. 1 rental-car operator, it trades at a P/B of 0.70x with a 3.95% dividend yield and now carries removed dilution risk on the strength side, whereas its high reliance on borrowing means interest rates and interest costs drive net profit, and the collapsed sale may leave governance uncertainty lingering for a while.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt far exceeds equity (debt ratio 369.9%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 22.9%).
- Revenue rose 4.5% year over year, and the pace is quickening (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 6.6% higher than a year earlier.
- ROE is 8.2% (controlling-interest basis). It is above the sector average.
- Operating margin is 10.7%.
- The forward P/E sits below the sector median.
Ownership & governance As of 2025-12-31
Largest shareholder Hotel Lotte 38.14% (corporate)
Controlling bloc incl. related parties 61.21%
With the controlling bloc holding 61%, control is very secure but the free float is thin.
🔎 In-depth analysis
- Lotte Rental makes money by renting out and managing cars.
- Its revenue rests on three pillars.
- First, long-term auto leasing - renting cars to companies and individuals over multi-year terms - is the mainstay.
- Second, short-term auto rental, renting cars by the day to the month at destinations and airports.
- Third, a used-car resale business that sells lease-returned cars through auctions (Lotte Auto Auction) and the used-car platform 'T car.' In short, the core of the business is an asset cycle of 'buy a car, rent it out, then resell it.'
- The latest close is ₩32,250 and market capitalization is ₩1.2 trillion.
- The price sits above the 20-day line (₩30,062) and above the 60-day line (₩31,399).
- With the price above both the short- and mid-term moving averages, the trend looks favorable.
- The RSI (an auxiliary gauge that weighs upward against downward momentum over the past 14 days on a 0-100 scale) is 59.0, a neutral level.
- The one-month change is +7.9%, the three-month change is +4.5%, and the position versus the 52-week high is -8.0%.
- Relative strength against the KOSPI is 33 (on a 1-99 scale, computed from the past year's return versus the index with more weight on recent performance; higher means stronger than the market), placing it in roughly the top 68% of all stocks by strength.
- Over the past three months it lagged the index by 17.4%.
- Chart reading is best done alongside trading volume and disclosure dates.
- The valuation metrics are broadly low.
- The P/E ratio (how many times one year's earnings the price represents) is 9.18x.
- The P/B (how many times net assets the price represents) is 0.75x, trading below net assets.
- The dividend yield is 3.95% (₩1,200 per share), a high level.
- The payout ratio (the share of net profit distributed as dividends) is 34%, a comfortable level.
- ROE (how much is earned in a year on equity) is 8.2%, solid.
- The debt ratio (debt against equity), at 370%, looks high, but this is inherent to the rental business: buying vehicles in bulk to rent them out requires borrowing, so a high debt ratio is not by itself a distress signal.
- For the same reason free cash flow (FCF, the cash actually in hand) is negative, but this stems from buying new cars every year, not from weak operations.
- In the rental business, viewing these metrics through the lens of a typical manufacturer invites misreading.
- Revenue has risen for five straight years, reaching ₩2.9188 trillion in 2025 (up 4.5% year on year).
- Net profit rose 19.5% year on year to ₩127.6 billion in 2025.
- The first quarter of 2026 was especially strong: revenue of ₩730.9 billion (up 6.6%) and operating profit of ₩83.6 billion (up 24.8%), with the operating-profit gain standing out.
- This reflects a business-structure overhaul and cost improvement showing up in the actual numbers.
- Long-term lease vehicles in service grew 5.5% and costs improved, lifting that segment's operating profit 34%.
- Short-term rental operating profit surged 96%.
- Leading indicators of future results - vehicles put into service (+16.0%) and net additions (+23.7%) - also rose together, readying growth momentum for the second half.
- That said, first-quarter net-profit growth was only +1.6%.
- Operations improved, but interest costs from borrowing offset the gains at the net-profit line.
- The key to this year's earnings is how much of the larger operating profit flows past interest costs down to net profit.
- The biggest event this year was the May withdrawal of the rights offering.
- In February 2025 Lotte Rental had decided on an approximately ₩219.9 billion third-party allotment issue as a condition of a stake sale to the Affinity consortium.
- But after the Fair Trade Commission rejected the business combination in January 2026, sale talks were suspended, and on May 21 the company withdrew this rights offering.
- This removed the burden of a possible roughly 20% dilution of existing shareholders.
- On May 8 it disclosed preliminary first-quarter results, and on May 15 it filed the quarterly report, confirming the operating-profit improvement.
- On May 6 it announced an IR event and dividend-related matters.
- There are three strengths.
- First, as the country's No.
- 1 rental-car operator, it commands economies of scale and stable cash generation.
- Second, at a P/B of 0.70x and a 3.95% dividend yield, it sits in an undervalued range relative to assets and dividends.
- Third, the withdrawal of the rights offering removed dilution risk, and first-quarter operating profit rose nearly 25%, confirming the structural improvement in the numbers.
- The cautions are also clear.
- Given the nature of the rental business, its high reliance on borrowing means the interest-rate environment and interest costs drive net profit.
- Even if operating profit rises, a heavy interest burden can slow the improvement in net profit.
- Also, with the Affinity sale falling through, uncertainty around governance and the largest shareholder may linger for a while.
- In sum, if operating improvement pairs with rate stability, the undervaluation and high-dividend appeal come to the fore; conversely, if rates stay high or funding pressure grows, the improvement in net profit gets held back.
🔎 Valuation vs peers Undervalued
Domestic rental-car and mobility firms plus asset-based rental businesses; however, with major rivals such as SK Rent-a-Car unlisted or acquired, listed comparables are limited, so the judgment leans on business substance and on asset and dividend measures.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Lotte Rental | 9.18x | 0.75x | 8.15% |
On an asset basis (P/B 0.70x) and a dividend basis (3.95%), it sits in an undervalued range. The trailing P/E of 8.7x rests on last year's net profit that was held down by interest costs, so it does not fully capture the current direction of earnings, where operating profit is rising nearly 25%. On a forward basis the valuation drops further. In the rental business a high debt ratio (370%) and negative FCF appear structurally, so these should not be mistaken for distress. That said, because net profit is sensitive to interest rates and interest costs, resolving the undervaluation requires confirmation that the larger operating profit flows through to net profit. On balance, we judge it undervalued relative to assets and dividends, with the durability of net-profit improvement being the key to a re-valuation.
Price history Close · MA20 · MA60
The latest close is ₩32,250 and the market capitalization is ₩1.2 trillion. The price sits above its 20-day moving average (₩30,062) and above its 60-day moving average (₩31,399). It holds above both its short- and medium-term moving averages, so the trend looks healthy. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 59.0, a neutral level. The one-month change is +7.9%, the three-month change is +4.5%, and the position relative to the 52-week high is -8.0%. Relative strength versus the KOSPI is 33 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 32% of all stocks. Over the past three months it lagged the index by 17.4%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -17.42% / 6M -32.95% / 12M -60.62%
Key metrics vs whole-market median
Valuation
The P/E of 9.18x is below the whole-market median (13.81x). The P/B of 0.75x is below the whole-market median (1.15x). Both metrics are low versus peers, so the price is not expensive relative to earnings and assets.
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Intrinsic value (DCF estimate)
DCF (discounted cash flow) estimate — discount rate 9.2%, initial growth 9.6%→terminal 2.0%, 10-yr forecast, earnings-based. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 8.2%, above the whole-market average (5.0%). The operating margin is 10.7%. The debt ratio is 369.9%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $1.8B | $1.9B | $1.9B | +4.53% ↑ faster |
| Operating profit | $202.3M | $188.8M | $207.1M | +9.72% ↑ faster |
| Net profit | $79.5M | $70.8M | $84.6M | +19.51% ↑ faster |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $1.6B | $1.8B | $1.8B | $1.9B | $1.9B |
| Operating profit | $162.7M | $204.4M | $202.3M | $188.8M | $207.1M |
| Net profit | $75.3M | $58.5M | $79.5M | $70.8M | $84.6M |
| Revenue CAGR | 4-yr avg 4.77% | ||||
Revenue rose 4.5% year over year (2023 ₩2.8 trillion → 2024 ₩2.8 trillion → 2025 ₩2.9 trillion), and the three-year trend is 'rising'. The pace of growth also quickened from the prior year. Operating profit rose 9.7% year over year. Profit is growing at an accelerating pace. Over the 5 years on record, revenue compound annual growth (CAGR) is 4.8%. The two-year revenue CAGR is 3.0%. In the most recent quarter (Q1 2026), revenue was 6.6% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- P/E and P/B are both low versus peers, so the price looks inexpensive relative to earnings and assets.
- The dividend yield, at 3.7%, is on the high side.
Points to watch
- Debt far exceeds equity (debt ratio 369.9%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 22.9%).
Recent news & events searched · sourced
- 2026-05-21FilingWithdrawal of the approximately ₩219.9 billion third-party allotment issue that had been a condition of the Affinity sale - a follow-up step after the antitrust regulator's rejection of the business combination in January 2026 suspended the sale talks.Removes the concern of a roughly 20% dilution of existing shareholders. Positive for defending shareholder value in the short term, though governance uncertainty from the collapsed sale remains. Source
- 2026-05-08EarningsDisclosure of preliminary first-quarter 2026 consolidated results. Revenue of ₩730.9 billion (+6.6%) and operating profit of ₩83.6 billion (+24.8%), with operating profit up double digits on the business-structure overhaul and cost improvement.Structural improvement confirmed in the results. However, net-profit growth was +1.6% as interest costs offset the net-profit improvement. Source
- 2026-05-15FilingFiling of the March 2026 quarterly report. Confirms improving leading indicators: long-term lease vehicles in service +5.5% and that segment's operating profit +34%, short-term rental operating profit +96%, vehicles put into service +16.0%, and net additions +23.7%.Provides the basis for second-half growth momentum. Whether the rising leading indicators translate into actual earnings is the point to watch. Source
- 2026-05-06IRAnnouncement of an IR event and a filing on changes in shares held by the largest shareholder and others, together with dividend and other shareholder-return matters.A signal of continued shareholder communication and a return policy. Confirms a return stance with a dividend yield of about 4%. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| First-quarter 2026 revenue and operating profit | revenue ₩730.9 billion / operating profit ₩83.6 billion (operating profit YoY +24.8%) | revenue ₩730.9 billion / operating profit ₩83.6 billion | Confirmed | link |
| Withdrawal of the rights offering | 2026-05-21 [] | approx. ₩219.9 billion 3 | Confirmed | link |
| 2026 net profit estimate (forward) | self-estimate (forward PER 7.9x) | — | Unverified | link |
Recent filings
- 2026-05-29Large-business-group status disclosure
- 2026-05-29Corporate governance report
- 2026-05-26OwnershipOwnership-change filing
- 2026-05-26OwnershipOwnership-change filing
- 2026-05-21Material-fact report (amended)
- 2026-05-19OwnershipOwnership-change filing
- 2026-05-18Amended filing
- 2026-05-15PeriodicQuarterly report
- 2026-05-08EarningsFair-disclosure notice
- 2026-05-06Disclosure
- 2026-05-06OwnershipLargest-shareholder ownership change report
- 2026-04-30EarningsEarnings disclosure
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.