[Click eStock] "Kumho Petrochemical Still Undervalued... Must Consider Industry Recovery and Shareholder Returns"

Hanwha Investment & Securities maintained a target price of 190,000 KRW and a 'Buy' rating on Kumho Petrochemical on the 20th, stating that considering the recovery of the industry and shareholder return policies, the stock is still undervalued.

Researcher Yoon Yong-sik stated, "Kumho Petrochemical's operating profit for the second quarter is estimated to be 95.9 billion KRW, a 22% increase from the previous quarter, exceeding the consensus (80.4 billion KRW) by 19%."

Researcher Yoon added, "We expect performance improvements in all business divisions except for the off-season power generation and energy sectors," and noted, "In particular, the recovery in tire demand and improvements in NB-Latex prices and sales volume have led to a noticeable increase in synthetic rubber profits."

He further predicted, "The recovery in synthetic rubber performance will continue in the second half of the year," and explained, "According to the new energy vehicle policy, automobile sales in China are expected to increase by 1 to 2 million units, and the high natural rubber prices will positively affect synthetic rubber demand and prices."

He also evaluated, "Considering the industry recovery and shareholder return policies, the stock remains undervalued," adding, "Over the past three years, 50% of treasury shares have been canceled, and a plan to repurchase treasury shares worth 50 billion KRW for future cancellation by September this year has been announced. Additionally, a dividend payout ratio of 25-35% has been proposed, demonstrating an active shareholder return policy."