[Click eStock] "Baekkwang Industry, Positive New Business Direction... Target Price Up"

[Asia Economy Reporter Eunmo Koo] KB Securities evaluated Baekkwang Industrial's new business initiative related to IT materials as positive, but noted that due to the nature of IT materials, it is still a time to watch patiently. The target stock price was raised from the previous 2,900 KRW to 3,300 KRW.

Baekkwang Industrial's second-quarter sales amounted to 40.3 billion KRW, a 0.7% increase compared to the same period last year, but operating profit decreased by 11.5% to 5 billion KRW. Baek Youngchan, a researcher at KB Securities, stated in a report on the 24th, "The decline in operating profit is due to a reduction in caustic soda sales," adding, "Second-quarter caustic soda sales were 16.5 billion KRW, down 4.6% year-on-year and 10.8% quarter-on-quarter."

Researcher Baek explained, "Due to sluggish demand in the dye industry and paper manufacturing sectors, second-quarter sales volume is estimated to have decreased by about 5% compared to the same period last year," and added, "Second-quarter sales of chlorine and hydrochloric acid were 21.8 billion KRW, a 4.8% increase year-on-year. Although domestic prices for hydrochloric acid and chlorine did not rise, growth in sales volume of high-purity chlorine and other specialty gases for semiconductors appears to have enabled external growth."

While the new business initiative related to IT materials is positive, it is assessed that more time is needed. In May, Baekkwang Industrial completed a high-purity hydrogen chloride production plant (annual production capacity of 1,500 tons) used for semiconductor cleaning. If the high-purity hydrogen chloride plant operates at full capacity and sales, annual sales of around 18 billion KRW are expected. Researcher Baek stated, "Although this new business, prepared for over two years, raises expectations, the characteristic of IT materials is that it takes a long time from quality certification to final delivery," and forecasted, "Quality certification for delivery has not yet been completed, and even after certification, commercial sales are expected to fully commence from the second half of next year."

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