[Asia Economy Reporter Park So-yeon] KB Securities maintained the target price of 545,000 KRW for Hyosung Advanced Materials, stating that "a steady improvement in tire reinforcement material performance and profit growth in new businesses are expected in 2022."
According to FN Guide on the 16th, KB Securities recently forecasted Hyosung Advanced Materials' Q4 sales and operating profit last year to be 966.6 billion KRW and 130.7 billion KRW, respectively.
Q4 tire reinforcement material sales and operating profit were expected to be 532.5 billion KRW and 76.7 billion KRW, respectively. Although the selling price of PET tire cords rose by about 10% compared to the previous quarter, tire reinforcement material operating profit was estimated to have slightly decreased from the previous quarter due to a decline in sales volume during the off-season.
New businesses such as carbon fiber and aramid were expected to see improvements in both scale and operating profit, estimated at 29.8 billion KRW and 1.1 billion KRW respectively, compared to Q3. Baek Young-chan, a researcher at KB Securities, said, "In the case of aramid, initial costs occurred due to the commercial operation of a new plant in Q3, but it is judged that yield improvements were achieved through increased operating rates in Q4."
For 2022, sales and operating profit were forecasted at 3.6823 trillion KRW and 470.2 billion KRW, respectively. Researcher Baek mentioned, "This year is expected to be a mix of positive and negative factors." He added, "Based on a tight supply-demand balance and stable raw material prices, the improvement in tire reinforcement material performance is expected to continue," and "profit growth through expansion is also anticipated in new businesses." However, he noted, "A decline in the performance of the Vietnam subsidiary due to a drop in spandex prices is inevitable."
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