[Click eStock] "Daehan Yuhwa, Profit Turnaround Delayed Due to Red Sea Dispute... Target Price ↓"

Yuanta Securities stated on the 31st that "due to the logistics crisis caused by the conflict in the Red Sea region, the improvement of the petrochemical industry outlook will be delayed," and downgraded the target price of ‘Daehan Yuhwa’ from 300,000 KRW to 250,000 KRW.

Hwang Kyuwon, an analyst at Yuanta Securities, evaluated that "the price of naphtha flowing from the Middle East and Europe to Asia has risen due to the Red Sea conflict, increasing the cost burden on petrochemical companies."

He added, "the transportation cost of petrochemical products exported from Korea to Africa and Europe has increased from 50 USD to 200 USD per ton," and predicted, "due to the burden of transportation costs, buyers are delaying product purchases, so sales will not increase as much as expected."

Analyst Hwang noted, "the global expansion scale of NCCs producing ethylene from naphtha this year has decreased to 5.2 million tons, half of the recent five-year average of 10 million tons," and forecasted, "if the Red Sea conflict issue eases, the petrochemical industry outlook will improve due to the reduction in global expansion volume, leading to improvements in Daehan Yuhwa’s performance and stock price."

Reflecting this, he downgraded Daehan Yuhwa’s target price but maintained a ‘buy’ opinion.