[Click eStock] "Kolon ENP Target Price Raised↑"

Shinhan Investment Corp. raised the target price of Kolon ENP by 9% to 12,000 KRW on the 22nd.

Kolon ENP is transforming from a traditional engineering plastics company into a future advanced materials enterprise through a name change.

It is expected to improve profitability through high value-added products (such as medical POM) and secure growth potential by expanding eco-friendly products.

Ultimately, securing sustainability is the key to business operations and increasing corporate value, and a stock price revaluation is expected to begin in earnest.

In the first quarter, sales and operating profit recorded 123.1 billion KRW and 10.5 billion KRW, respectively. The scale and profit of POM (copolymer) improved by 18% and 26% compared to the previous quarter. Sales volume increased by 20% due to price increases following recovery in front-end demand and inventory buildup.

The compound segment showed good performance with a 14% increase in scale and 126% increase in profit compared to the previous quarter. Shipment volume increased due to the recovery of automobile production, and ASP also rose.

With improved profitability and growth momentum highlighted in each business division, operating profit for this year is expected to reach 40.3 billion KRW. In POM, growth in scale due to market recovery and global top-tier competitiveness will lead to the start of high value-added medical POM supply, resulting in profitability improvement.

In the compound segment, sales volume is expected to increase due to steady automobile production, and the expansion of the eco-friendly product portfolio will meet the eco-friendly material needs of automakers.

Jinmyung Lee, Senior Researcher at Shinhan Investment Corp., said, "We raise the target price to 12,000 KRW due to upward revisions in earnings estimates following steady POM market conditions and normalization of compound profits," adding, "With a current PER of 11 times, considering the improved earnings strength and growth momentum compared to past boom periods, the upside remains valid."