[Click eStock] "Daehan Yuhwa, Industry Rebound Due to Global Facility Shutdown"

On the 15th, Samsung Securities forecasted that Daehan Yuhwa would benefit from an industry rebound due to the closure of facilities by global competitors. However, they lowered the target stock price to 140,000 KRW as the third-quarter earnings came in worse than expected.

Hyun-ryeol Cho, an analyst at Samsung Securities, stated, "As the global petrochemical industry downturn deepens, European and Asian companies have begun shutting down ethylene cracker facilities," adding, "The scale of facility closures this year is 2.37 million tons, which is about 1% of global ethylene capacity."

Analyst Cho predicted, "European petrochemical companies are conducting strategic reviews of their existing facilities, so the scale of facility closures is expected to expand further." Accordingly, he anticipated that "the chemical industry will gradually rebound."

He also said, "Following the election of former President Donald Trump as the next U.S. president, downward pressure on international oil prices will increase," and forecasted, "A decline in oil prices will lead to lower costs for the petrochemical industry, positively impacting the overall industry conditions."

However, while suggesting the possibility of an industry recovery, Samsung Securities lowered Daehan Yuhwa's target stock price from 160,000 KRW to 140,000 KRW. This adjustment was made after a 2% downward revision of the 12-month target book value per share (BPS) due to the deterioration in third-quarter earnings, and the target price-to-book ratio (PBR) was also adjusted from 0.53 times to 0.48 times.