[Market Focus] Hyosung TNC Hits Record High on Expectations of Windfall from Chinese Rival's Bankruptcy

Hyosung TNC is showing strong performance in early trading.

As of 9:05 a.m. on January 16, Hyosung TNC surged 8.85% (23,500 won) from the previous day to 289,000 won, marking a new 52-week high.

The surge in investor sentiment appears to be driven by a flurry of securities reports raising Hyosung TNC's target price on this day. As the world's leading spandex manufacturer, Hyosung TNC is accelerating its earnings growth through increased operating rates and expanded sales of high value-added products. In addition, an impending bankruptcy crisis at a Chinese competitor is expected to create excess demand for spandex.

Choi Younggwang, a researcher at NH Investment & Securities, said, "Hyosung TNC is expected to post an operating profit of 326.9 billion won this year, up 23.7% from the previous year, thanks to higher operating rates, increased sales of high value-added products, and improved cost competitiveness." He also noted, "If semiconductor memory manufacturers increase their production in the future, the profitability of the company's nitrogen trifluoride (NF3) business could also improve." The target price was raised from 270,000 won to 330,000 won.

Recently, as the risk of market exit for Zhuzhou Huahai, the world's third-largest spandex producer, has increased, expectations for a windfall for rival Hyosung TNC have also grown. Since the Chinese company accounts for about 15.6% of the country's total production capacity as a key player, some predict that if facility closures are made official, regional supply-demand balance and prices/spreads could be rapidly reevaluated in the short term.

Lee Dongwook, a researcher at IBK Investment & Securities, commented, "Taking into account the emerging liquidity risks facing major players, the spandex market could shift into an irreversible phase of supply reduction." He added, "In this scenario, unlike the current gradual trend, there is a need to consider the possibility that product prices could rise sharply in a short period." He raised Hyosung TNC's target price from 330,000 won to 360,000 won.