[Click eStock] "Kolon Industries, PBR Hits All-Time Low... Maintain Buy"

On the 12th, IBK Investment & Securities maintained a buy rating on Kolon Industries, stating that its stock price has fallen excessively compared to EBITDA.

Lee Dong-wook, a researcher at IBK Investment & Securities, said, "This year's estimated price-to-book ratio (PBR) is 0.4 times, the lowest since the company's founding in 2010," adding, "Although stable operating cash flow continues due to a diversified business structure, there were investment burdens from expansion efforts last year and the year before, and the film division recorded an annual operating loss of 70 to 80 billion KRW, which affected the overall consolidated performance slowdown."

Kolon Industries' industrial materials division is expected to continue a quarterly earnings growth trend this year, starting from the low point in the third quarter of last year. Regarding aramid, the core product of the industrial materials division, profitability has declined compared to its peak but still remains high. The operating rate of the expanded capacity is currently at 50%, and it is expected to increase toward the second half of the year due to expanded orders for pulp plants and 5G optical cables.

The chemical division is also expected to see a performance rebound starting from the first quarter of this year. Researcher Lee Dong-wook explained, "For the main product, petroleum resin, price increases have occurred due to rising logistics costs, and epoxy resin is expected to show solid growth due to the price decline of raw materials such as epoxy raw material (ECH) and bisphenol A (BPA), as well as expanded applications in mobile, communication servers, and automotive electronics products."