[Click eStock] "Precious Metal Prices Strong in Second Half... Maintaining Target Price for Korea Zinc"

On the 5th, NH Investment & Securities maintained its 'Buy' rating and target price of 700,000 KRW for Korea Zinc, stating that "the benefits from the strong precious metals prices in the second half of the year are expected to continue." The closing price on the previous day was 535,000 KRW.

On the same day, Lee Jae-kwang, a researcher at NH Investment & Securities, said, "Considering concerns about economic slowdown, the trend of interest rate cuts, and unstable international situations, the strong prices of precious metals are expected to persist in the second half of the year." He added, "In particular, the price of silver, which is relatively cheaper compared to gold, has a high possibility of rising. Due to a shortage in refined silver supply, supply is limited, but new demand is increasing with the expansion of solar power production."

Korea Zinc's mid- to long-term growth will be driven by the expansion of copper and nickel smelting production capacity. The researcher stated, "Copper smelting capacity is planned to expand from 31,000 tons in 2023 to 150,000 tons by 2028, and nickel to 63,000 tons during the same period." He added, "Applying current prices and exchange rates, sales of copper and nickel are expected to be approximately 1.9 trillion KRW and 1.4 trillion KRW, respectively. Korea Zinc is expected to achieve greater performance growth through increased sales of processed products such as copper foil and nickel sulfate."

Regarding the third-quarter performance this year, the researcher said, "Solid results similar to those of the second quarter are expected to continue." He added, "Prices of gold, silver, and zinc are expected to rise by 3-5%, but exchange rate declines are a variable. However, compared to the previous year, the growth rate of about 50% seen in the second quarter is expected to continue."

Meanwhile, Korea Zinc, established in 1974, is a non-ferrous metal smelting company boasting unique smelting technology. Its current production capacity is 870,000 tons of zinc (640,000 tons at Onsan, 230,000 tons at Australia SMC) and about 430,000 tons of refined silver annually. Its global market share is 6% for zinc and 4% for refined silver. As of the end of last year, Youngpoong (with a 25.2% stake) and other special related parties held a total of 47.5%, while the National Pension Service held 8.4%.