[Asia Economy Reporter Park Jihwan] Yuanta Securities maintained a 'Buy' rating on Pungsan on the 7th, stating that its fourth-quarter earnings last year are expected to improve significantly compared to the previous year, and raised the target price by 8.3% from the previous 36,000 KRW to 39,000 KRW.
Researcher Lee Hyunsoo of Yuanta Securities said, "The sales volume of copper in the fourth quarter of last year is estimated to be 45,000 tons, a 5% increase compared to the previous quarter," adding, "Sales volume is expected to increase for two consecutive quarters following the second quarter, which was heavily impacted by the COVID-19 pandemic."
However, although the average LME copper price from September to November rose by 10% compared to June to August, it is analyzed that the copper sales price only increased by 8% due to the strength of the Korean won.
Pungsan's overall performance showed significant improvement compared to the previous year. The consolidated operating profit for the fourth quarter of last year is expected to increase by 240% year-on-year to 56.9 billion KRW.
The outlook for this year is even brighter. As of the 5th of this month, the LME copper price stood at 7,995 USD per ton, approaching the 8,000 USD level last seen in February 2013.
Researcher Lee forecasted, "The sales volume of high value-added products such as plates and strips was affected by the sluggish automotive industry until 2019, but demand recovery in the downstream industries has appeared since the second half of last year," adding, "The recovery in plate and strip sales volume is expected to gradually continue from the fourth quarter."
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