[Click eStock] "Korea Zinc Shows Earnings Stability but Needs Momentum"

Korea Investment & Securities Issues 'Buy' Rating and 560,000 KRW Target Price... Closing Price on 20th at 418,000 KRW

[Asia Economy Reporter Kum Boryeong] Korea Zinc is showing earnings stability, but analysis suggests that new momentum is needed.

According to Korea Investment & Securities on the 21st, Korea Zinc's Q4 earnings last year are expected to be sales of 1.8 trillion KRW and operating profit of 217.9 billion KRW. Despite a decline in the exchange rate in Q4, sales volume increased by 5.6% compared to the previous quarter. Annual operating profit last year is expected to increase by 10.7% year-on-year due to rising prices of non-ferrous metals such as zinc and lead, as well as exchange rate increases.

Jung Haneul, a researcher at Korea Investment & Securities, said, "In Q3 last year, zinc prices and zinc smelting fees rose simultaneously due to factors such as the increased possibility of a US-China trade agreement and increased zinc imports by China." He added, "However, recently, forecasts of increased zinc concentrate supply by the International Lead and Zinc Study Group (ILZSG) have been announced, causing zinc prices to start weakening. Considering that smelting fees account for 51% and free metal 41% of zinc concentrate smelting sales, the fact that smelting fees and non-ferrous metal prices tend to have an inverse relationship means that Korea Zinc's earnings growth potential is limited."

Researcher Jung believes new momentum is needed this year. He said, "ILZSG forecasts that zinc supply will increase by 4.7% this year compared to the previous year, while consumption will increase by only 0.9%. This implies a decline in zinc metal prices this year." He emphasized, "Therefore, the effect of rising zinc smelting fees will inevitably be limited. For stock prices to rise beyond periods of strong safe-haven asset preference, new momentum such as increased sales volume or dividend expansion is necessary."

Korea Investment & Securities has given Korea Zinc a 'Buy' investment rating with a target price of 560,000 KRW. The closing price on the 20th was 418,000 KRW.

This content was produced with the assistance of AI translation services.