Hi Investment & Securities announced on the 11th that it expects earnings improvement for Korea Zinc and raised the target stock price from the previous 570,000 KRW to 600,000 KRW. The investment opinion remains a buy, and it was presented as the top pick within the sector.
Researcher Kim Yoonsang of Hi Investment & Securities stated in the report on the same day, "We raised the stock price to 600,000 KRW reflecting the upward revision of earnings forecasts," and analyzed, "The target price was calculated by applying a 12-month forward Book Value Per Share (BPS) of 464,440 KRW and a Target Price-to-Earnings ratio (P/E) of 1.3 times."
Researcher Kim also recommended Korea Zinc as the top pick for the second half of the year. He explained, "In a macro environment characterized by interest rate cuts and economic uncertainty, portfolios with a high proportion of precious metals show the greatest advantage within the sector," adding, "Even if prices of non-ferrous metals such as zinc and lead decline, the rise in the KRW-USD exchange rate offsets this, maintaining a stable profit structure." Additionally, he cited reasons such as △ expansion of copper production, △ construction of a nickel smelter as future growth drivers, △ structural earnings turnaround of subsidiaries like SMC, Steel Cycle, and Ignio Holdings, and △ continuation of shareholder-friendly policies such as high dividends.
He emphasized the need to pay attention to the structural improvement in subsidiary earnings. Researcher Kim said, "From the second quarter onward, subsidiary earnings are expected to improve significantly due to normalization of sales volume following increased operating rates, reduction of losses from subsidiary acquisitions (Ignio Holdings), elimination of high raw material costs, and decrease in fixed costs (Steel Cycle)," and noted, "Earnings improvement due to the strength of zinc and silver prices is not a significant investment point."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
