PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩1,200 per share · Prices as of the 2026-10-02 close
Lotte Rental is simultaneously delivering profit improvement led by long- and short-term auto rental while undergoing an ownership handover from the Lotte group to private equity firm TPG.
In Q2 2026 revenue was KRW 765.8bn and operating profit KRW 84.6bn, both above the year-earlier quarter, yet net profit attributable to owners fell to KRW 19.7bn from KRW 30.2bn.
By segment, long-term and short-term auto rental drove profit growth while used-car disposal operating profit fell 21.1% year on year, per the company's August 5, 2026 disclosure.
The Korea Fair Trade Commission approved TPG's acquisition of Lotte Rental shares on September 1, 2026, covering a 61.17% stake at KRW 59,000 per share for KRW 1,310.5bn in total.
The company's September 2025 value-up plan targets returning more than 40% of net profit to shareholders over three years, and any change in that level after the ownership shift is a key watch item.
The debt-to-equity ratio fell to 372.3% in 2025 from 434.4% in 2022, but vehicle funding leaves the company sensitive to rates and used-car prices, with bond early-redemption issues tied to the ownership change still open.
Lotte Rental is Korea's largest car rental operator, built around long-term auto rental for corporates, sole proprietors and individuals, alongside short-term auto rental, car sharing (Green Car), industrial-goods-focused business rental, and the disposal of vehicles that have completed their rental life.
Per company disclosure, rental accounted for 72.2% of Q1 2026 revenue versus 27.8% for used-car disposal, reflecting an ongoing shift away from disposal dependence.
Reported Q2 2026 segment revenue was KRW 421.5bn for long-term auto, KRW 217.1bn for used-car disposal, KRW 52.5bn for short-term auto and KRW 45.3bn for business rental.
Business rental is concentrating on three core categories, office automation equipment, measuring instruments and forklifts, while shrinking non-core lines such as aerial work platforms, with discontinued operations targeted to end in the first half of 2027.
T car, the used-car retail platform launched in May 2025, is the vehicle for reducing wholesale disposal reliance and posted KRW 30.9bn of Q2 2026 revenue according to the company.
Its customer base spans corporates and sole proprietors outsourcing fleet management, short-term users travelling for leisure or business, and inbound foreign tourists.
Competitively, second-ranked SK Rent a Car sits under private equity firm Affinity Equity Partners, so both leading operators are now controlled by financial investors. Domestic rental-car registrations totalled 1,211,645 units in Q2 2026 according to the Korea Rent a Car Business Association Federation.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩748.8B | ₩77.2B | 10.3% |
| 2025Q3 | ₩758B | ₩89B | 11.7% |
| 2025Q4 | ₩726.4B | ₩79.3B | 10.9% |
| 2026Q1 | ₩730.9B | ₩83.6B | 11.4% |
| 2026Q2 | ₩765.8B | ₩84.6B | 11.1% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩2.7T | ₩2.7T | ₩94.4B | 100.0% | 7.3% | 434.4% |
| 2023 | ₩2.8T | ₩305.2B | ₩120B | 11.1% | 8.8% | 392.1% |
| 2024 | ₩2.8T | ₩284.8B | ₩106.8B | 10.2% | 7.2% | 377.1% |
| 2025 | ₩2.9T | ₩312.5B | ₩127.6B | 10.7% | 8.1% | 372.3% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04
Annual revenue rose gradually from KRW 2,738.9bn in 2022 to KRW 2,752.3bn in 2023, KRW 2,792.4bn in 2024 and KRW 2,918.8bn in 2025. Operating profit slipped from KRW 305.2bn in 2023 (11.1% margin) to KRW 284.8bn in 2024 (10.2%) before recovering to KRW 312.5bn in 2025 (10.7%).
Net profit attributable to owners moved from KRW 94.4bn in 2022 to KRW 120.0bn in 2023, KRW 106.8bn in 2024 and KRW 127.6bn in 2025.
Quarterly, revenue and operating profit were KRW 758.0bn and KRW 89.0bn in Q3 2025, KRW 726.4bn and KRW 79.3bn in Q4 2025, KRW 730.9bn and KRW 83.6bn in Q1 2026, and KRW 765.8bn and KRW 84.6bn in Q2 2026, keeping revenue in a KRW 730bn to 770bn band and operating profit near KRW 80bn.
Q2 2026 topped the year-earlier quarter, when revenue was KRW 748.8bn and operating profit KRW 77.2bn, and the company attributed the gain to a higher mix of high-margin products and cost efficiency.
By segment, long-term auto rental operating profit rose 25.6% year on year to KRW 45.3bn and short-term auto rental jumped 76.2% to KRW 9.9bn, while used-car disposal profit fell 21.1% to KRW 26.4bn.
Management said it converted quality vehicles into used-car long-term rental and monthly short-term rental assets rather than selling into a weak market, with the used-car long-term rental mix rising from 14.1% in Q2 2024 to 20.6% in Q2 2026.
However, Q2 2026 net profit attributable to owners of KRW 19.7bn came in below both Q2 2025 at KRW 30.2bn and Q1 2026 at KRW 31.1bn, so operating gains did not flow through to the bottom line; Daishin Securities estimated in an August 11, 2026 report that excluding one-off costs the Q2 operating profit growth rate would have been 11.7%.
On cash flow, operating cash flow was negative KRW 512.6bn in 2025 against positive KRW 325.5bn in 2024 and KRW 498.3bn in 2023, reflecting both the rental-industry convention of booking vehicle purchases within operating activities and expanded fleet deployment.
Korea's rental-car market is mature, with registrations above 1.21 million units, so product mix and pricing now separate profitability more than fleet growth does.
Rising upfront costs and taxes on outright vehicle purchases are pushing corporates and sole proprietors toward long-term rental, and Lotte Rental's Q1 2026 long-term rental unit deployment rose 16.0% year on year while used-car rental grew 27.1%.
Short-term rental tracks inbound tourism: the company said foreign customers made up 37% of daily short-term rental revenue in Q2 2026, up 7 percentage points year on year, with revenue per transaction from foreign customers roughly 1.8 times that of domestic customers.
Used-car disposal, by contrast, is directly exposed to prices and interest rates, and the company cited global conditions and rising rates as reasons for the weak Q2 2026 result.
On competitive position, market shares were tallied at 20.8% for Lotte Rental and 15.7% for SK Rent a Car as of Q3 2024, preserving the leader's scale advantage.
On regulation, the Korea Fair Trade Commission blocked Affinity's purchase of Lotte Rental in January 2026 over the combination of the top two players, but approved TPG's stake acquisition given the absence of business overlap, illustrating the review benchmark for this market.
The net effect is a shift from scale-led rivalry toward profitability-led competition around vehicle funding costs, disposal strategy and corporate client acquisition.
The nearest checkpoint is completion of the ownership transfer. Lotte signed an agreement on August 11, 2026 to sell a 61.17% stake to the TPG side and said that after the Fair Trade Commission approval it plans to close the deal within October following shareholder meeting and other steps.
In the core business, the company said adding insurance-replacement partners in June and July 2026 should improve that line from the third quarter, and that T car opened a fourth offline hub in Busan in August to accelerate retail sales from Q3.
Overseas, it established a Japanese subsidiary in July 2026 and, in partnership with ORIX Auto Corporation, began short-term rental services for Korean travellers in Okinawa, with plans to extend to Sapporo and Fukuoka.
Business rental continues to concentrate on three core categories while winding down non-core lines, keeping discontinued operations on track to end in the first half of 2027.
On broker estimates, Daishin Securities said in an August 11, 2026 report that it projected Q3 operating profit of KRW 93.3bn and 2026 revenue of KRW 3,078.6bn, and raised its target price to KRW 53,000.
Hana Securities said in a September 2, 2026 report that it lifted its target price to KRW 57,000 on expectations of expanded shareholder returns after the TPG approval.
On credit, NICE Investors Service and Korea Investors Service assessed on August 12, 2026 that the ownership change has limited rating impact, while flagging the new owner's financial policy and liquidity management as focal points.
The valuation debate hinges less on earnings themselves than on capital policy after the ownership handover. On earnings, operating profit dipped and then recovered after 2023, and net profit attributable to owners over the most recent four quarters sits in a range not far from the full-year 2025 level.
The shares trade at a modest premium to book value, which should be read alongside the rental industry's practice of funding assets with debt, leaving equity relatively small versus earnings.
For dividends, the baseline is the September 2025 value-up plan target of returning more than 40% of net profit, and Hana Securities said in a September 2, 2026 report that it expects dividends well above that existing target under TPG ownership.
Conversely, when earnings volatility rises, as in Q2 2026 when net profit was pressured by non-operating costs, the basis for calculating return capacity can shift as well.
The agreed sale price for the existing shares in this transaction was disclosed at KRW 59,000 per share, a negotiated level that includes a control premium and should be interpreted accordingly.
PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04
In Q2 2026, long-term auto rental operating profit rose 25.6% year on year to KRW 45.3bn and short-term auto rental climbed 76.2% to KRW 9.9bn. The company said the higher-margin used-car long-term rental mix rose from 14.1% in Q2 2024 to 17.9% in Q2 2025 and 20.6% in Q2 2026, while per-vehicle accident costs declined. The recurring pattern of operating profit growing faster than revenue is the core of the bullish case.
The Fair Trade Commission's September 1, 2026 approval of TPG's stake purchase closed out the sale-related uncertainty that had persisted since the January 2026 prohibition of the Affinity deal.
The company's September 2025 value-up plan targets returning more than 40% of net profit over three years, and Hana Securities said in a September 2, 2026 report that it expects a sharply higher return level under TPG. Rating agencies assessed on August 12, 2026 that the ownership change has limited impact on the credit rating.
Used-car retail platform T car posted KRW 30.9bn of revenue in Q2 2026, up 108.8% year on year, and the company said a fourth offline hub opened in Busan in August to expand sales from Q3.
Overseas, it set up a Japanese entity in July 2026 and, with ORIX Auto Corporation, began short-term rental services in Okinawa, with stated plans for Sapporo and Fukuoka. The basis for this case is a structural shift that reduces wholesale disposal reliance and lifts revenue over each vehicle's life cycle.
Q2 2026 used-car disposal revenue was KRW 217.1bn and operating profit KRW 26.4bn, down 2.9% and 21.1% year on year. The company pointed to global conditions and rising rates, and said it converts vehicles into rental assets instead of selling when prices are weak. Because that strategy defers disposal gains, quarterly profit swings can widen with used-car price cycles.
Total liabilities were KRW 5,792.5bn at end-2025 with a debt-to-equity ratio of 372.3%, down from 434.4% in 2022 but still high. Operating cash flow was negative KRW 512.6bn in 2025, and because vehicle purchases run through operating activities, fleet expansion translates directly into external funding needs.
According to a Maeil Ilbo report dated August 12, 2026, the ownership change creates the possibility of early bond redemption, with 12 public and private bond series totalling KRW 991.0bn maturing through 2029.
Q2 2026 operating profit rose to KRW 84.6bn, but net profit attributable to owners was only KRW 19.7bn, below both KRW 30.2bn in Q2 2025 and KRW 31.1bn in Q1 2026. Daishin Securities said in an August 11, 2026 report that excluding one-off costs the Q2 operating profit growth rate would have been 11.7%.
If financing costs and one-off items recur, calculations of shareholder-return capacity based on annual net profit could be disturbed.
Under private equity control, the policy mix across investment, dividends and capital structure can change.
NICE Investors Service noted on August 12, 2026 that the exit-oriented nature of private equity means potential dividend expansion or capital structure change bears watching, while Korea Investors Service flagged strategy shifts and liquidity management as focal points.
During the earlier Affinity phase, VIP Asset Management built a 5.2% stake and formally asked the board to consider buybacks and cancellation, prompt execution of shareholder returns, and capital-reduction dividends.
Rental economics rest on funding vehicles with debt and recovering value through rental fees, so funding rates and end-of-term residual values drive profitability. The company cited rising rates and market uncertainty as reasons for weak Q2 2026 used-car disposal.
As residual value gaps widen across powertrains such as hybrids and battery electric vehicles, disposal gains and losses can diverge more depending on fleet composition.
Used-car retail via T car and Japanese short-term rental are still early contributors to revenue, and expanding offline hubs and local operations carries fixed cost and inventory burdens. Short-term auto rental is tied to inbound tourism, so growth rates could reverse quickly if travel demand slows.
Business rental is passing through a phase of shrinking top line as non-core lines are cut, with Q2 2026 revenue down 11.4% year on year.
Whether the 61.17% stake sale to the TPG side closes, plus changes at the shareholder meeting and board. The company said it plans to close within October, and closing will also reveal how early bond redemption requests and funding plans are handled.
Q3 results. Key points are the gap versus the KRW 93.3bn Q3 operating profit estimate published by Daishin Securities on August 11, 2026, and whether the non-operating costs that weighed on Q2 net profit recur.
Whether the new owner discloses a shareholder-return policy. The question is whether the existing value-up target of returning over 40% of net profit is maintained, raised or changed, and whether buybacks and cancellations are used alongside it.
The change in used-car retail mix after the Busan T car hub ramps up, and progress in extending the Okinawa service to Sapporo and Fukuoka. These indicate the execution pace of reducing wholesale disposal reliance.
Whether the wind-down of discontinued business rental operations completes as planned. If it proceeds on schedule, it will show whether the revenue drag and profit dilution from non-core lines is cleared.
As Korea's leading car rental operator, Lotte Rental posted 2025 revenue of KRW 2,918.8bn and operating profit of KRW 312.5bn for a 10.7% margin, recovering from 2024, and operating-level improvement continued through the first half of 2026 on long- and short-term auto rental.
Used-car disposal operating profit, however, fell 21.1% in Q2 2026, and net profit attributable to owners of KRW 19.7bn that quarter trailed both the year-earlier and prior quarters, so operating gains did not fully reach the bottom line.
Financially, the debt-to-equity ratio eased from 434.4% in 2022 to 372.3% in 2025 but remains high, and the vehicle funding model leaves sensitivity to interest rates and used-car residual values.
On ownership, after the January 2026 prohibition of the Affinity deal, Lotte signed an agreement with the TPG side for a 61.17% stake at KRW 59,000 per share totalling KRW 1,310.5bn, received Fair Trade Commission approval on September 1 and said it plans to close within October.
Attention therefore shifts to the new owner's financial policy and shareholder-return level, and to execution pace at newer legs such as T car and the Japan business.
The bullish case rests on mix improvement and possible changes to return policy, the bearish case on disposal-profit volatility and leverage and funding terms, and both are testable against disclosures over the next two to three quarters.
This report is for information purposes only and contains no buy or sell recommendation to be used as a basis for investment decisions.
Report written 2026-09-05 · Data as of 2026-09-04
This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.