[Click eStock] "LX International, High Dividend Defensive Stock... Earnings Expected to Exceed Market Estimates"

[Asia Economy Reporter Kwon Jaehee] Hana Financial Investment maintained a 'Buy' rating on LX International on the 16th and set a target price of 47,000 KRW. This is because the resource sector's profits are expected to drive annual performance as raw material prices continue to show additional strength.

LX International's Q2 performance this year is expected to exceed market expectations. Q2 sales are projected to reach 5.2 trillion KRW, a 31.6% increase compared to the same period last year. It is anticipated that the rise in exchange rates, freight rates, and raw material prices will have a favorable impact across all sectors. Operating profit is expected to increase by 99.5% to 250.9 billion KRW during the same period. In the resources sector, a sharp rise in coal prices compared to the previous quarter, along with increased production at the Indonesian GAM mine and strong palm oil market conditions, is expected to result in significant profit growth. The trading and new growth sectors likely secured meaningful margins due to the Australian high-calorie coal prices reaching historic highs amid a weak exchange rate. Logistics is expected to follow a trend of freight rates gradually declining after peaking early in the year. Although both scale and profit are expected to slightly decrease compared to the previous quarter, the absolute profit level is still evaluated positively.

Researcher Yoo Jaeseon of Hana Financial Investment stated, "Although there has been high volatility in thermal coal prices for power generation recently, prices have been formed at over $300 per ton since March, which is absolutely favorable," adding, "Despite China's coal inventory being at a high level, the absence of significant declines suggests that high levels may be maintained for the time being."

Researcher Yoo analyzed, "As the year-end approaches, the value as a high-dividend defensive stock based on performance will be highlighted."