Maintaining "Buy" Rating and Target Price of 40,000 Won
On December 23, Hana Securities maintained its "Buy" investment rating and a target price of 40,000 won per share for LX International. Although the company's fourth-quarter results are expected to fall short of market expectations, the recovery of the resources division is anticipated to become more visible as coal prices have passed their lowest point.
According to Hana Securities, LX International's fourth-quarter revenue is projected to reach 4.1 trillion won, a 3.3% decrease compared to the previous year. Operating profit is estimated at 59.5 billion won, representing a sharp decline of 36.8% year-on-year.
Yoo Jaeseon, a research analyst at Hana Securities who authored the report, stated, "Fourth-quarter results are expected to fall below market expectations," explaining, "This is due to a temporary cost issue in the resources division, as well as declines in key performance indicators such as thermal coal prices and logistics freight rates compared to last year." He added, "Despite the positive effects of a rising exchange rate, a seasonal off-peak period, and weak maritime freight and raw material prices will inevitably lead to a slowdown in topline growth."
However, Yoo also noted, "The ICI4 price is showing a gradual upward trend, and a recovery in the resources division's performance could become more apparent in 2026." The price of low-calorific value coal in Indonesia passed its lowest point in the third quarter. In addition, he assessed that falling oil prices and increased production volumes are expected to lower unit costs, supporting a performance recovery from 2026.
Furthermore, he analyzed, "Although trading and new growth sectors will see a decline in IT trading volumes, the performance recovery of energy subsidiaries and a weaker exchange rate will limit the year-on-year decrease in earnings. In logistics, while average freight rates per quarter remain stable, a seasonal decline in cargo volumes is expected to result in a quarter-on-quarter decrease in profits."
Accordingly, Hana Securities maintained its target price of 40,000 won and its "Buy" investment rating for LX International. The previous day's closing price for LX International was 32,500 won per share, still below Hana Securities' target price.
Additionally, Yoo pointed out that, regarding the Indonesian coal price having passed its lowest point, China's demand and policy will be crucial. He further commented, "If China strengthens its policy of controlling domestic coal production, there is a possibility that this could lead to an increase in Indonesian coal export prices, so continuous monitoring is necessary."
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