[Click eStock] "Kolmar BNH, Needs to Lower This Year's Earnings Expectations... Target Price Down"

[Asia Economy Reporter Song Hwajeong] Hana Financial Investment on the 21st downgraded the target price of Kolmar BNH from 85,000 KRW to 50,000 KRW, citing the need to lower performance expectations for this year due to COVID-19. The investment opinion was maintained as 'Buy.'

Kolmar BNH's third-quarter performance this year is expected to be negatively impacted by the implementation of the 4th level of 'social distancing.' Hana Financial Investment estimated Kolmar BNH's third-quarter sales to increase by 3.6% year-on-year to 151.5 billion KRW, and operating profit to rise by 3.1% to 23.8 billion KRW. Researcher Sim Eunju of Hana Financial Investment analyzed, "It is believed that not only domestically but also in major export countries such as China, business activities were restricted due to the impact of COVID-19," adding, "The reduced number of business days due to the Chuseok holiday is also expected to weigh on performance."

Kolmar BNH's consolidated sales and operating profit for this year are expected to be 641 billion KRW and 105.3 billion KRW, respectively. Sales are projected to increase by 5.6% compared to the previous year, but operating profit is expected to decrease by 3.6%. Researcher Sim explained, "With the implementation of stringent social distancing measures throughout the year, business activities have been significantly restricted," and "Due to the negative external environment, performance expectations for this year need to be lowered."

However, with the phased recovery of daily life (With COVID-19) starting next month, Kolmar BNH's business activities are expected to gain momentum. Researcher Sim said, "The performance trend from the end of this year to next year is positive due to the low base this year," and added, "Next year, meaningful growth can be expected with the resumption of business activities."