[Click e Stocks] "Yeongpung, Stake Value Rises with Goryeo Zinc Stock Price Increase"

[Asia Economy Reporter Song Hwajeong] Kiwoom Securities on the 31st raised the target price for Yeongpung from the previous 800,000 KRW to 950,000 KRW, reflecting the increase in asset value due to the recent rise in the stock price of Korea Zinc. The investment opinion was maintained as 'Buy.'

As Korea Zinc's stock price rose following the signing of a memorandum of understanding (MOU) for the secondary battery materials business with LG Chem, the value of Yeongpung's stake in Korea Zinc (27.5% ownership) increased from 2.1 trillion KRW on March 16 to 2.6 trillion KRW currently. Researcher Lee Jonghyung of Kiwoom Securities said, "Currently, Yeongpung's market capitalization is about 1.3 trillion KRW, which is only 50% of the value of its stake in Korea Zinc," adding, "Due to Korea Zinc's strong performance, Yeongpung's equity-method profit in the first half surged 62% year-on-year. The equity-method profit, which accounts for most of Yeongpung's net profit, is expected to exceed 200 billion KRW for the first time in 10 years, reaching 216 billion KRW this year (a 30% increase compared to the same period last year)."

The operating value on a separate basis is also on an upward trend. Yeongpung's operating profit on a separate basis for the first half increased by 373% year-on-year to 19.5 billion KRW, maintaining a stable profit trend since the fourth quarter of last year, when it recorded an operating loss due to one-time expenses. At the end of the second quarter, the net cash on a separate basis was 368.9 billion KRW, the highest in four quarters, maintaining a mid- to long-term upward trend, and the operating value on a separate basis has steadily increased since the fourth quarter of last year, which was the bottom.

Researcher Lee said, "Although the stock price has risen somewhat in the past six months, it is still significantly undervalued," adding, "The book value of the Jongno Yeongpung Bookstore building owned by Yeongpung as of the end of the second quarter is about 400 billion KRW, and the book value of the Yeongpung building in Nonhyeon-dong and the adjacent building is 75 billion KRW. Real estate values and 6.6% of treasury shares were not reflected in this asset value calculation. The land book value of these buildings amounts to about 380 billion KRW but has been maintained for 10 years since it was last updated at the end of 2011, so the actual market value is expected to far exceed the book value."