[Click eStock] "LX International, Q3 Earnings Soar Amid Raw Material Price Surge"

[Asia Economy Reporter Ji Yeon-jin] NH Investment & Securities announced on the 28th that LX International is expected to achieve third-quarter earnings that exceed market expectations due to a strong logistics business and a sharp rise in resource prices.

In the third quarter of this year, with the continued strength in logistics and the full-scale contribution of profits from raw materials, sales are expected to increase by 29% year-on-year to 4.0787 trillion KRW, and operating profit is projected to rise by 334% to 151.4 billion KRW. Additionally, due to increased electricity demand and China’s coal production and power generation regulations that run counter to this demand, coal prices

are hitting record highs, so the strong operating profit is expected to continue at least through the fourth quarter.

LX International is forecasted to have an operating profit of 535.4 billion KRW this year, a 235% increase compared to the previous year, driven by the sharp rise in raw material prices. Next year, it is expected to decrease by 16% to 451.3 billion KRW. Based on increased operating cash flow, the company plans to continue investing 300 billion KRW annually over the next four years in new businesses, including nickel mine acquisitions, resource recycling business, carbon emission rights business, and eco-friendly power generation, as well as expanding the distribution business of COVID-19 diagnostic kits. This is expected to reduce uncertainties related to the exclusion of coal business investments.

Dongyang Kim, a researcher at NH Investment & Securities, emphasized, "LX International, as a major subsidiary of LX, is expected to reduce the proportion of coal business by promoting synergies within the newly established holding company, strengthening eco-friendly and wellness new businesses, and enhancing shareholder value based on strong earnings momentum after the spin-off."