[Featured Stock] KCC Plummets Right After Opening Due to Earnings Below Expectations

[Asia Economy Reporter Ji Yeon-jin] KCC has been plummeting since the early trading hours on the 15th. This is interpreted as a result of the fourth-quarter earnings announced the previous day falling short of expectations.

On this day, KCC started trading at 323,000 KRW, down 13.98% from the previous day, and the decline is widening. As of 9:10 AM, it showed 315,500 KRW, down 16.11% from the previous day.

KCC's consolidated sales for last year, announced the previous day, amounted to 5.8748 trillion KRW, an increase of 15.6% compared to the previous year, and operating profit recorded 382.6 billion KRW, up 185%. However, net income turned to a loss with a deficit of 58.5924 billion KRW.

Hana Financial Investment evaluated that although these results fell short of estimates, the margin improvement trend of the silicon subsidiary Momentive is not considered to have slowed down.

The silicon business saw a decrease in volume due to the transition of the CS&I (basic product group such as siloxane) line to high value-added products, but it is estimated that overall sales will show only a slight decrease as prices rise mainly for high value-added product groups.

Yoon Jae-sung, a researcher at Hana Financial Investment, said, "The margin reduction of Momentive from July to October last year was due to the sharp rise in raw material silicon metal prices," adding, "From November, margins have been improving as the sharply dropped costs were applied, and it is judged that a solid margin trend has continued in January as well."