[Click eStock] "Hankook Tire, Only Upside Left ... Target Price Up"

[Asia Economy Reporter Kwon Jae-hee] Daishin Securities maintained its 'Buy' rating on Hankook Tire & Technology on the 3rd and raised the target price by 18% from the previous level to 46,000 KRW.

Hankook Tire's Q2 performance this year recorded sales of 2 trillion KRW and operating profit of 175.3 billion KRW. Operating profit decreased by 6.3% compared to the same period last year but exceeded the market consensus of 154.1 billion KRW by 14%.

Researcher Kim Gwi-yeon of Daishin Securities interpreted, "Despite the Russia-Ukraine conflict and China's re-lockdown, the better-than-expected price increases and mix improvement led to a rise in the average selling price (ASP), driving strong performance."

Net profit exceeded estimates due to gains from the sale of a logistics center (about 100 billion KRW) and foreign exchange gains.

Strong performance is expected next year as well. Sales for next year are expected to reach 8.1 trillion KRW, and operating profit is forecasted at 671.2 billion KRW, representing increases of 14% and 5% respectively compared to the previous year.

Researcher Kim said, "With the stabilization of raw material prices and freight costs, it is expected that stable profitability can be maintained in the second half, exceeding previous forecasts. Following the launch of the EV-exclusive tire brand 'ION' in Europe in May, a global launch is scheduled for September, and based on existing references and full lineup competitiveness, the eco-friendly vehicle momentum is also worth anticipating."