[Click eStock] "Hyosung Advanced Materials, Carbon Fiber Facility Expansion... Sustained Profitability"

IBK Investment & Securities

IBK Investment & Securities analyzed on the 19th that Hyosung Advanced Materials is expected to maintain high profitability through continuous expansion of its carbon fiber facilities. The investment opinion 'Buy' and the target price of 590,000 KRW were maintained.

Lee Dong-wook, a researcher at IBK Investment & Securities, explained, "Hyosung Advanced Materials will advance by one year the previously planned construction of carbon fiber plants 5 and 6 in Jeonju to strengthen its market dominance in the highly growing carbon fiber sector," adding, "The carbon fiber production capacity will increase from the current 9,000 tons to 14,000 tons in the first half of next year."

The researcher said, "The reason for changing the expansion schedule is that with the increasing demand for carbon fiber, the expansion of demand for solar insulation materials has significantly improved the selling price and profitability, greatly enhancing the investment economics," and analyzed, "Favorable exchange rates for export-oriented companies, tight offshore supply and demand in the US and Europe, economies of scale from expansion, and continuous expansion efforts will allow high profitability to continue this year as well."

He also stated, "The PAN-based carbon fiber market size is expected to grow at an average annual rate of over 10%, from 85,000 tons in 2021 to 327,000 tons this year," and added, "Hyosung Advanced Materials has completed the development of T-1000 grade carbon fiber, which is usable in the space, aerospace, defense, and UAM industries, ranking third in the world, and plans to enter the related market."