[Click eStock] "Hyosung Advanced Materials Shows Remarkable Growth in New Materials Sector"

[Asia Economy Reporter Park Ji-hwan] Ebest Investment & Securities maintained a 'Buy' rating and a target price of 189,000 KRW for Hyosung Advanced Materials on the 2nd, stating that performance improvements are being made in the rapidly growing new materials sector.

Eanna Lee, a researcher at Ebest Investment & Securities, explained, "Q3 earnings this year recorded sales of 636.8 billion KRW and operating profit of 11.9 billion KRW, down 17% and 69% respectively compared to the previous year," adding, "The fiber segment of tire reinforcement materials turned profitable as operating rates increased due to recovery in the US automobile market following China."

However, there was an assessment that the delay in price increases due to the European market limited spread improvements. Researcher Lee said, "In the case of steel cord, low-price sales of long-term inventory were carried out due to the withdrawal from the Ulsan steel cord plant and accelerated relocation of equipment to the Quang Nam subsidiary in Vietnam."

The performance improvement in the new materials sector is notable, especially in carbon fiber, which was expected to break even in Q4 but recorded profitability in Q3, showing rapid growth.

Lee forecasted, "Hyosung Advanced Materials is the only company in Korea producing carbon fiber, a core material in the hydrogen economy," adding, "After additional testing, it will supply to Hyundai Motor in 2022 alongside Toray as a dual supplier."

He added, "Even without full-scale entry into the hydrogen economy, carbon fiber can replace all materials where aluminum is used, so external growth and profit margin increases are expected through expansion into various industries."