[Click eStock] "Hankook Tire & Technology, Tire Market Boom... Target Price Up"

Shinhan Investment Corp. raised the target price for Hankook Tire & Technology to 54,000 KRW on the 15th, citing the prolonged boom in the tire industry and expecting stable performance through the first half of this year. The investment rating was maintained at 'Buy.'

Researcher Jeong Yong-jin forecasted, "Q4 sales this year are expected to increase by 1% year-on-year to 2.3 trillion KRW, and operating profit is expected to rise by 64% to 348.4 billion KRW," adding, "This exceeds market expectations by 5%."

Researcher Jeong noted, "Replacement (RE) demand in Europe and North America was more robust than expected," and diagnosed, "The irregular weather has reduced the gap between the seasonal peak and off-season."

He also emphasized, "It is estimated that market share improvement centered on all-weather tires continued in Europe," and "This is expected to offset the slowdown in original equipment (OE) demand and sustain strong performance."

However, the risk of a resurgence in the global logistics crisis remains. Researcher Jeong pointed out, "Concerns about the global logistics crisis originating from the Red Sea have lasted longer than expected, which is a risk factor," and noted, "If the shortest Asia-Mediterranean route is disrupted, domestic exporters highly dependent on European exports may face cost and shipping issues."

Nevertheless, he added, "Most long-term supply contracts have been renewed at normal price levels," and "The majority of contractually adjusted freight rates are scheduled for mid-2024 or later, and the company has a low proportion of routes affected by logistics disruptions."