[Click eStock] "LX Hausys Earnings Surprise, Target Price Maintained"

Ebest Investment & Securities maintained a buy rating and a target price of 55,000 KRW for LX Hausys on the 25th, stating that "the fundamental structural improvements that have been actively ongoing since last year have once again been confirmed by the market."

Kim Se-ryeon, a researcher at DLSKF Ebest Investment & Securities, said, "LX Hausys' sales in the first quarter of this year were 849.5 billion KRW, similar to the same period last year and in line with market expectations," adding, "Operating profit was 32.4 billion KRW, a 101.1% increase compared to the same period last year, marking a welcome earnings surprise that exceeded expectations by 45.6%."

He explained, "The biggest factor behind the earnings surprise is largely due to the automotive materials and industrial film divisions recording an operating margin of 4.9%. The expansion of automotive fabric sales centered in North America and the increase in industrial film application models due to diversification of overseas clients created an operating leverage effect that led to margin improvement."

He also stated, "Along with the downward stabilization of major raw material prices, the recent rise in housing transaction volumes in January and February is expected to sustain optimism for a performance turnaround through the second quarter."

Researcher Kim added, "This stock has typically shown a pattern of strong first-half and weaker second-half performance. Although we have somewhat lowered margin expectations conservatively for the second half, the upside for profit estimates remains open depending on industry conditions and performance changes. Since there has been no significant stock price momentum after dividends, this earnings report is likely to serve as a short-term upward catalyst for the stock price."