[Click eStock] "LX International, Highlighted Undervaluation"

NH Investment & Securities evaluated that the undervaluation of LX International is becoming prominent. The investment opinion 'Buy' and the target price of 41,000 KRW were maintained.

NH Investment & Securities forecasted that LX International's sales and operating profit in the fourth quarter will increase by 15% and 49% year-on-year to 4.2851 trillion KRW and 116.9 billion KRW, respectively.

Dongyang Kim, a researcher at NH Investment & Securities, said, "Despite maintaining Indonesian coal prices and production volumes, resource profitability is expected to deteriorate compared to the previous quarter due to waste rock disposal costs for increased production in 2025, while palm oil is expected to perform well due to strong prices." He added, "Trading, which includes coal trading, and new growth will be affected by a decrease in IT trading volumes." He continued, "Logistics is expected to perform better than expected due to strong cargo volumes despite a decline in maritime freight rates."

He particularly anticipated that the attractiveness of undervaluation will be highlighted. He said, "LX International confirmed a performance bottom in 2023 through Indonesian and Chinese coal production increases despite coal market volatility, LX Glass, Poseung Green Power, and the recognition of Indonesian AKP nickel mine consolidation." He added, "Although the contribution of new business operating profit is still low, the transition to eco-friendly businesses is underway."

He emphasized, "Growth is expected to be strengthened through additional acquisitions of nickel and copper mines, which will help resolve undervaluation. The application of improved dividend policies is also expected to enhance the effect of increased dividends per share due to improved performance."