[Click eStock] "Hyosung Advanced Materials, Appropriate Market Cap 3.2 Trillion KRW... Target Price Up 53%"

[Asia Economy Reporter Ji Yeon-jin] Daishin Securities announced on the 30th that it has newly set the target stock price for Hyosung Advanced Materials at 880,000 KRW, a 53% increase from the previous target, stating that the appropriate market capitalization applying the same price-to-earnings ratio (PER) as Kolon Industries, which has a similar business structure including tire reinforcement materials and aramid, is 3.2 trillion KRW.

Researcher Han Sang-won of Daishin Securities explained, "The value of carbon fiber (a key material for hydrogen tanks), which currently contributes only about 1% to profits, has not been properly reflected, so there is additional potential for stock price increase corresponding to the value of carbon fiber."

Operating profit in the second quarter of this year recorded 117.8 billion KRW, a 41.3% increase from the previous quarter, slightly exceeding market expectations (111.8 billion KRW). The operating profit from tire reinforcement materials showed a stronger-than-expected performance at 73.5 billion KRW compared to the previous quarter. Entering a phase of price increases due to a surge in tire demand, profitability has been rapidly improving since the previous quarter. The wire rod segment (steel cord) also succeeded in turning profitable.

Spandex operating profit also increased by 25% compared to the previous quarter, indicating continued strong performance due to product price increases. During the same period, carbon fiber operating profit doubled thanks to the rise in average selling price (ASP).

Operating profit for the third quarter is expected to increase by 20% from the previous quarter to 141.7 billion KRW, and the researcher stated that continued improvement in profitability of core businesses such as tire reinforcement materials and spandex is expected to drive further earnings growth.