SK Networks’ acquisition of AJ Rent a Car will be positive, said Samsung Securities on Sept. 27, upgrading the recommendation to a “buy” from a “hold” and raising the target price to 6,300 won (US$5.65) from 5,500 won.
It will take over 42.24 percent stake of the car rental company for 300 billion won, and its market share will almost double to 22 percent from 12 percent, becoming the second-largest operator following Lotte, said analyst Baek Jae-seung.
It will also have fewer competitors in the market and change strategy to generating profits from investing aggressively. SK can enjoy economies of scale in purchasing vehicles, and earnings from car rental business will improve, he added.
