[Click eStock] "Kolon Industries, Expecting Effects from Deficit Business Restructuring and Expansion"

Yuanta Securities forecasted on the 21st that Kolon Industries will reach a boom period in the future, supported by the restructuring of loss-making businesses and the effects of facility expansion. They maintained a 'Buy' investment rating and a target price of 70,000 KRW.

Kolon Industries recorded an operating profit of 30.6 billion KRW in the first quarter of this year, a 6% increase compared to the same period last year. Hwang Kyuwon, a researcher at Yuanta Securities, explained, "The seasonality of the fashion business segment is distinct, so comparing it with the previous quarter is not very meaningful," adding, "While growth in the industrial materials and fashion segments has stagnated, there was a 5 billion KRW cost for voluntary retirement ahead of the restructuring of the loss-making film business."

The combined operating profit for the second and third quarters is expected to improve by 35% year-on-year, reaching 118.6 billion KRW. Researcher Hwang analyzed, "The fabric tire reinforcement materials have entered a recovery phase, and expansions of facilities for aramid and high-purity petroleum resin will continue," and "Additionally, the restructuring of the polyester film segment will reduce losses."

He continued, "Supported by the restructuring of loss-making businesses and the effects of facility expansion, operating profit is estimated to reach 250.4 billion KRW in 2025," adding, "The current price-to-book ratio (PBR) is around 0.43 times, positioned at the lower end of the historical band, so we expect strong stock price recovery from the second to third quarter."