[Click eStock] "Hucems, Q1 Earnings Surprise Expected Despite COVID-19 Issues"

[Asia Economy Reporter Park Ji-hwan] Kiwoom Securities forecasted on the 12th that Hukchem will record an earnings surprise in the first quarter of this year, surpassing market expectations despite the impact of COVID-19. Accordingly, they maintained a buy rating and a target price of 28,000 won.

Researcher Lee Dong-wook of Kiwoom Securities projected, "Hukchem's first-quarter sales will increase by 7.1% year-on-year to 180 billion won, and operating profit will remain the same as the previous year at 29 billion won."

Lee analyzed, "Despite the reduced operating rate of Hanwha Chemical's TDI plant, a major customer of DNT, and the slowdown in product demand due to the spread of COVID-19, the first-quarter operating profit this year will significantly exceed the market expectation of 20.6 billion won."

He explained, "Although the TDI market conditions are sluggish, recent demand growth in Southeast Asia is supporting the price floor. Nitric acid, crude aniline, and MNB continue to show solid performance, and due to the tightening supply and demand of carbon emission permits, the price per ton is maintaining around 40,000 won."

Researcher Lee estimated, "About 300,000 to 350,000 tons of carbon emission permits will be sold in the first quarter, and it appears that all will be sold on the spot market to maximize profitability," adding, "Next year, the profit contribution from carbon emission permits is expected to exceed 30%."

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