[Click eStock] "Daehan Yuhwa Continues Growth This Year... Target Price Raised by 40%"

[Asia Economy Reporter Park Jihwan] Daishin Securities maintained its 'Buy' investment rating on Daehan Yuhwa on the 27th, stating that the growth trend of its core business will continue this year, and raised the target price by 40% from the previous 250,000 KRW to 350,000 KRW. Daehan Yuhwa is the global No.1 player in UWPE for separators. It is analyzed that the future stock price level will be determined by the growth potential of PE for separators.

According to Daishin Securities on the same day, Daehan Yuhwa's operating profit in the fourth quarter of last year surged 20% quarter-on-quarter to 75.9 billion KRW. The operating margin also improved by 0.5 percentage points quarter-on-quarter, reaching 15%.

Researcher Hansangwon evaluated, "Despite entering the seasonal off-season in the fourth quarter, the chemical market showed an unusually strong performance due to supply reductions caused by facility troubles and regular maintenance in the region, including LG Chem Yeosu NCC." In particular, it was explained that the rebound in the rubber chain centered on BD, amid the continued solid market conditions of synthetic resin product groups, will also lead to improved NCC profitability.

Operating profit this year is expected to increase by 92% year-on-year to 318.6 billion KRW. It is explained that the favorable chemical market conditions will continue, and high NCC margins are expected to be maintained. Researcher Han said, "In particular, expectations for improved MEG profitability due to the rebound of the previously sluggish chemical fiber chain, as well as continuous sales growth through increased operating rates of PE for separators (at least 40% annual growth on average for the next two years), are anticipated."

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