[Click eStock] "Kumho Petrochemical Q4 Operating Profit Expected to Surpass Consensus by 40%"

[Asia Economy Reporter Oh Ju-yeon] Hana Financial Investment forecasted that Kumho Petrochemical's operating profit in the fourth quarter of this year will exceed market consensus by 40%.

On the 16th, Hana Financial Investment projected Kumho Petrochemical's operating profit for Q4 this year to be 281.1 billion KRW, a 1648% increase compared to the same period last year. They explained that this figure surpasses the consensus (201.0 billion KRW) by 40%. Accordingly, the 12-month target stock price was also raised from 250,000 KRW to 270,000 KRW.

Researcher Yoon Jae-sung explained, "If this happens, it will be the fourth consecutive quarter exceeding consensus and a figure approaching the record high of Q1 2011 (290 billion KRW)." Considering that there was a one-month regular maintenance across all business divisions, he assessed that the company effectively has an operating profit capacity exceeding 300 billion KRW.

Additionally, with the NBL export price sharply rising compared to the previous quarter, the synthetic rubber division's profit is showing the highest level in about nine years, and the operating profit of synthetic resin and phenol derivatives is expected to reach an all-time high. This is because the margin of one of the core products, high value-added synthetic resin (ABS), is recording the highest level in 20 years, and the margins of bisphenol (BPA) and acetone are also increasing.

Accordingly, operating profit for Q1 next year is expected to exceed 300 billion KRW for the first time ever, reaching 329.1 billion KRW. This is analyzed to surpass the current consensus by 116%.

Researcher Yoon said, "First, considering that the effect of regular maintenance in the previous quarter has been removed and the global NBL/ABS/BPA utilization rates have reached 100%, surpassing the critical point of supply-demand balance, I believe the market consensus will be quickly revised upward."

Researcher Yoon noted that although Kumho Petrochemical has been undervalued, the first cause?the issue of reducing Asiana Airlines shares?was resolved as the agenda passed at the general shareholders' meeting yesterday, removing uncertainty. Regarding the second uncertainty, participation in the Kumho Resort acquisition, assuming a minimum sale price of 300 billion KRW, considering Kumho Petrochemical's current debt ratio of 50%, cash and cash equivalents of 600 billion KRW, and additional large-scale cash inflows in 2021, it is judged not to be a financial burden.

Researcher Yoon said, "However, since other options such as dividend expansion and related business investments also exist, I expect the management to make wise choices to enhance corporate value and shareholder value."

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