[Click eStock] "Daehan Yuhwa, Slower-than-Expected Industry Recovery... Target Price Down"

Yuanta Securities evaluated on the 20th that the recovery speed of the business conditions for Daehan Petrochemical is progressing more slowly than expected. The investment opinion 'Buy' was maintained, but the target price was lowered from the previous 250,000 KRW to 210,000 KRW.

Hwang Kyuwon, a researcher at Yuanta Securities, explained, "As the recovery of the general petrochemical business conditions is progressing slowly, the operating rate of the Naphtha Cracking Center (NCC) remains stagnant around 85%. Moreover, the sales volume of specialty products such as polyethylene and polypropylene resins for secondary battery separators also appears to be sluggish."

However, Researcher Hwang noted, "We need to get through the weak tunnel in the third quarter. Demand conditions are improving, and with the recent decline in international oil prices, we can expect a spread improvement effect. Additionally, global ethylene capacity expansions are easing the burden with 10.11 million tons in 2022, 7.68 million tons in 2023, 6.13 million tons in 2024, and 5.20 million tons in 2025."

He added, "Although the target price is lowered reflecting the slower-than-expected recovery speed of the business conditions, the price-to-book ratio (PBR) is approaching the level seen during the COVID-19 shock, so the buy opinion is maintained."