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Lotte rental

089860 · KOSPI · ₩089860 · 롯데렌탈

₩52,600▲ ₩2,950 (5.94%)End-of-day · Oct 28, 2026 · End-of-day prices.
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Valuation model · Discounted cash flow (DCF)

We use a 5-year discounted cash flow: the value of the cash the business is expected to produce, in today's money.

Fair value per share

₩559,258

vs the current price (₩52,600)

Enterprise value
₩25T
Equity value
₩20T
WACC
5.0%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal. This is not financial advice.

Why the model and the price differ

The model is 963% away from today's price. A gap this size usually means the market expects something the past figures don't show yet, or the model leaves something out. What we can see:

  • To match today's price of ₩52,600, the model needs an operating margin of 8.6% every year (it uses 33.3%).
  • Or revenue growth −26.1 points a year higher than assumed in each of the 5 years.
  • Margins ranged from 10.2% to 100.0% over the last 5 years, so this is a cyclical business. The model uses the average; the price may be set by where the cycle is now. Try the margin fade option.
  • Today's P/E is 16.1× against a typical 10.6× over the last 10 years.

Treat the model as a starting point: change the assumptions to the story you believe, and compare with the multiples check below.

Bear / Base / Bull

Bear
₩297,365
+465.3%
Base
₩559,258
+963.2%
Bull
₩1,115,662
+2,021.0%

Bear: revenue growth 3 points lower every year, EBIT margin 2 points lower, WACC 1 point higher. Bull: the opposite.

Assumptions

Sign in to change the assumptions and see the results update. Sign in

Cycle options

Margin path

Every year uses the cycle-average margin (33.3%).

Revenue growth

  • 2.1%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (2.1% a year, annual reports), fading to 3% by year 5.

  • 2.4%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (2.1% a year, annual reports), fading to 3% by year 5.

  • 2.6%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (2.1% a year, annual reports), fading to 3% by year 5.

  • 2.8%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (2.1% a year, annual reports), fading to 3% by year 5.

  • 3%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (2.1% a year, annual reports), fading to 3% by year 5.

Business

  • 33.3%

    Operating profit as a share of revenue.

    Default: through-the-cycle average of the last 12 months and the last 5 annual reports' operating margins.

  • 27.5%

    Share of operating profit paid as corporate tax.

    Default: Korea's top corporate tax rate (25%) plus 10% local income tax.

  • 3%

    The non-cash cost of wearing out equipment, added back to cash flow (% of revenue).

    Default: not in the statements, so a typical level.

  • 4%

    Money spent on factories, equipment, software and other long-term assets (% of revenue).

    Default: not in the statements, so a typical level.

  • -10%

    Stock and unpaid customer bills, less unpaid supplier bills, as a % of revenue. Each year's extra revenue ties up this much more cash.

    Default: working capital (current assets less cash and deposits, minus current liabilities other than borrowings) as a share of revenue, averaged over the last 3 years.

Discount rate

  • 2%

    How fast cash flows keep growing every year after year 5.

    Default: about Korea's long-run inflation plus real growth.

  • 4.08%

    Yield on Korea's 10-year government bond: the return with almost no risk.

    Default: Korea Treasury Bond 10-year yield on 2026-10-29.

  • 0.6

    How much the share moves when the market moves: 1 means just like the market.

    Default: 105 weeks of weekly returns against KOSPI (official index); raw beta 0.02, adjusted toward 1 and kept between 0.6 and 2.0.

  • 5.5%

    The extra return investors want for owning shares instead of bonds.

    Default: a typical premium for Korean shares.

  • 5.58%

    The interest rate the company would pay to borrow.

    Default: the 10-year yield plus a 1.5% credit spread.

Starting point

Revenue (TTM to H1 2026)
₩3T
Net debt (borrowings and leases − cash and deposits)
₩4.5T
+ Stakes and investments
₩206B
Associates, long-term financial assets and deposits (book value)
Shares
36,309,388
Share price
₩52,600
Market cap
₩1.9T

TTM = trailing 12 months: the last four reported quarters added together. "TTM to H1 2026" is the 12 months up to the latest quarterly or half-year report (H1 = to the end of June). Year 1 grows from there.

Past years and projection

Grey columns are reported results from the annual reports (after-tax EBIT at the model's tax rate), so you can check the growth and margin assumptions against the past. Years 1–5 are the model.

FY2023FY2024FY2025Year 1Year 2Year 3Year 4Year 5
Revenue₩2.8T₩2.8T₩2.9T₩3T₩3.1T₩3.2T₩3.3T₩3.4T
Growth0.5%1.5%4.5%2.1%2.4%2.6%2.8%3.0%
EBIT₩305B₩285B₩313B₩1T₩1T₩1.1T₩1.1T₩1.1T
EBIT margin11.1%10.2%10.7%33.3%33.3%33.3%33.3%33.3%
After-tax EBIT₩221B₩206B₩227B₩735B₩752B₩772B₩794B₩817B
+ Depreciation———₩91B₩94B₩96B₩99B₩102B
− Capital spending———₩122B₩125B₩128B₩131B₩135B
− Working capital₩1.3T−₩337B₩130B−₩6.3B−₩7.3B−₩8.1B−₩9B−₩9.9B
Free cash flow———₩711B₩729B₩748B₩770B₩793B
Discount factor———0.9520.9060.8630.8210.782
Present value———₩677B₩660B₩646B₩632B₩621B

Terminal value ₩27T, worth ₩21T today: 87% of enterprise value. It assumes spending settles at 110% of depreciation once growth slows to the terminal rate.

Cross-check: what the market has paid before

For cyclical businesses, analysts check a DCF against the multiples the stock has traded at through past cycles. Price / book is the usual anchor for them: P/E looks highest at the bottom of a cycle, when earnings are smallest, and lowest at the top. The price each band would give today:

LowTypicalHigh
Price / book (book value ₩43,521 a share)Now 1.21×₩30,8810.71×₩34,3790.79×₩9,588,186220.3×
Price / earnings (last 12 months: ₩3,262 a share)Now 16.1×₩26,8478.23×₩34,58010.6×₩50,60015.5×
P/E on run-rate earnings (Q2 2026 × 4: ₩2,167 a share)Now 24.3×₩17,8398.23×₩22,97810.6×₩33,62315.5×

Low, typical and high are the 10th percentile, middle and 90th percentile of month-end multiples since 2021, each against the latest report out by then, per share at today's share count; loss years and P/E above 100 are left out. Run-rate earnings are one quarter × 4, not a forecast. Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Sensitivity

Fair value per share as two inputs change; the middle is the current case.

WACC ↓ · Terminal growth →1.0%1.5%2.0%2.5%3.0%
4.0%₩582,056₩707,025₩893,287₩1,200,566₩1,803,490
4.5%₩482,402₩570,532₩693,380₩876,482₩1,178,545
5.0%₩407,432₩472,616₩559,258₩680,032₩860,042
5.5%₩348,990₩398,953₩463,042₩548,229₩666,974
6.0%₩302,156₩341,529₩390,657₩453,675₩537,437

Now (TTM)

Market cap
₩1.9T
Enterprise value
₩6.4T
P/E
16.1×
P/B
1.2×
P/S
0.6×
EV/EBITDA
—
Dividend yield
2.3%

Over time (at each year end)

20252024202320222021
Price₩31,500₩29,950₩27,750₩27,650₩38,100
Market cap₩1.1T₩1.1T₩1T₩1T₩1.4T
P/E9.0×10.2×8.4×11.4×12.2×
P/B0.7×0.7×0.7×550.4×173.0×
P/S0.4×0.4×0.4×0.4×0.6×
EV/EBITDA—————
Dividend yield3.8%4.0%———

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
Lotte rental16.1×1.2×0.6×—2.3%
Coway10.5×1.9×1.4×—0.0%
Cuckoo Homesys3.6×0.4×0.4×—5.3%
Socar—1.7×0.8×—0.9%
Q AID—4.8×2.8×—0.0%
AJ Networks3.3×0.4×0.2×—0.0%
A One Cubetech————0.0%
Similar companies (median)3.6×1.7×0.8×—0.0%

Calculated from end-of-day prices and filed financial statements. Not a recommendation. This is not financial advice.

Also known as: Lotte rental / 롯데렌탈 / 089860 / KRX:089860

Source: KRX statistical information