[Click eStock] "Hansol Paper, Continued Expectation of Earnings Recovery"

On the 24th, Eugene Investment & Securities analyzed that Hansol Paper's performance recovery will continue. The investment opinion of "Buy" and the target price of 14,000 KRW were maintained.

Hansol Paper recorded provisional sales of 571.2 billion KRW and an operating loss of 12.7 billion KRW in the fourth quarter of last year. Researcher Park Jong-sun of Eugene Investment & Securities said, "The significant operating loss was largely due to the substantial bad debt provision in the environmental (construction) sector," adding, "The bad debt provision for the logistics warehouses in Icheon and Ansan was 39.1 billion KRW cumulatively in the third quarter of last year, but with additional provisions this time, it reached about 70 billion KRW annually."

He evaluated, "Excluding the bad debt provision for the logistics warehouses, the headquarters' paper division is recovering its performance positively," and "With the reversal of declines in ocean freight rates and pulp prices, the paper division recorded an operating profit of 21.2 billion KRW in the fourth quarter of last year, showing a recovery compared to the previous quarter."

Eugene Investment & Securities expects that Hansol Paper's sales and operating profit in the first quarter of this year will be 577.5 billion KRW and 26.5 billion KRW, respectively, continuing the performance recovery trend.

He said, "The paper division is easing cost burdens due to the stabilization of pulp prices and ocean freight rates, and plans to gradually diversify export regions beyond the U.S. market for printing paper and thermal paper," adding, "Paper labels are replacing plastic labels, increasing demand in various fields such as food and beverage, logistics, medical, pharmaceutical, and cosmetics, which is expected to contribute to mid- to long-term performance growth." He also added, "The bad debt provision in the environmental (construction) sector is in the final stage."