[Click eStock] "Asia Cement, Rebound Expected with Shareholder-Friendly Policies"

Shinhan Investment Corp. analyzed on the 14th that Asia Cement is expected to see a stock price rebound due to its shareholder-friendly policies. The investment opinion 'Buy' and the target price of 14,600 KRW were maintained.

Asia Cement recorded consolidated sales of 314 billion KRW and operating profit of 40.2 billion KRW in the fourth quarter of last year. This represents increases of 6.4% and 8.2%, respectively, compared to the same period last year. Jiwoo Lee, a researcher at Shinhan Investment Corp., explained, "Despite a decline in domestic cement shipments starting from the third quarter, the year-end cement price increase and the decline in thermal coal prices drove the improvement in performance," adding, "Profitability was disappointing, which is understood to be due to a temporary rise in thermal coal prices caused by the Israel-Palestine war at the end of the year and an increase in electricity costs due to higher electricity rates."

The expected sales and operating profit for this year are 1.2164 trillion KRW and 158.7 billion KRW, respectively. Researcher Jiwoo Lee said, "Despite a decrease in shipment volume in 2024, the performance improvement trend is expected to continue," and added, "Thanks to last year's cement price increase and the ready-mixed concrete price increase earlier this year, a solid sales scale is expected to be maintained."

He also anticipated that shareholder-friendly policies would have a positive effect. He explained, "The cement industry is a representative low PBR (price-to-book ratio) sector with an average of 0.6 times," and added, "Asia Cement's strong shareholder return policy announcement based on record-breaking performance growth last year drove the stock price increase."

He said, "The expected net profit on a separate basis this year is about 60 billion KRW or more, and securing about 25 billion KRW in resources is expected, so continuous implementation of shareholder return policies can be anticipated," adding, "Considering the expected expansion of dividend payout ratio and increase in dividend per share (DPS), the PBR of 0.41 times is still judged to be undervalued." He further added, "Since the change to a shareholder-friendly stance is remarkable, it is sufficient to expect a rebound momentum."