[Asia Economy Reporter Hyunseok Yoo] Research Alom forecasted on the 13th that JC Chemical's profitability will improve due to the rise in refining margins, as the price of palm oil, the main raw material for biodiesel, has reached an all-time high. The target stock price was revised upward from the previous 9,700 KRW to 10,500 KRW.
Choi Seonghwan, Senior Researcher at Research Alom, explained, "The futures price of palm oil traded on the Malaysia Commodity Exchange is 3,791 ringgit per ton (approximately 1.03 million KRW), marking the highest price since futures trading began in 1990." He added, "This is due to supply disruptions in Indonesia and Malaysia, which account for 84% of global palm oil production, caused by COVID-19," and noted, "JC Chemical's palm plantation business in Indonesia recorded sales of 33 billion KRW last year."
He emphasized, "The golden age of crops has led to increased harvest yields," and "The rise in palm oil prices is continuing to improve profitability, which is expected to have a positive impact on performance improvement."
Researcher Choi stated, "The Ministry of Trade, Industry and Energy decided in February to raise the mandatory blending rate of biodiesel in domestic diesel fuel to 3.5% starting this July," forecasting that "the domestic biodiesel market will grow rapidly."
He analyzed, "The government passed an amendment to the Renewable Portfolio Standard (RPS), increasing the RPS ratio from the existing 10% to 25% by 2034." Accordingly, the demand for JC Chemical's bio-heavy oil is also expected to increase.
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