Ssangyong Cement, Shipment Recovery and Price Increase Potential...Q1 Earnings Expected to be 'Stable'

[Asia Economy Reporter Park Jihwan] Hanwha Investment & Securities forecasted on the 13th that Ssangyong Cement's operating profit for the first quarter of this year will meet market expectations. The investment opinion 'Buy' and the target stock price of 8,000 KRW were maintained.

Song Yurim, a researcher at Hanwha Investment & Securities, evaluated, "Since Q (quantity), P (price), and C (cost) can all move favorably, continuous attention is needed."

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Hanwha Investment & Securities expected Ssangyong Cement's consolidated first-quarter sales to increase by 1.2% year-on-year to 317.6 billion KRW, and operating profit to decrease by 2.7% to 29.9 billion KRW during the same period. This figure aligns with the market consensus operating profit of 29.2 billion KRW.

Although the first quarter is generally an off-season for performance, it is forecasted that cement shipment volume will show a recovery trend, resulting in solid performance despite the base burden from the previous year. The increase in shipment volume is attributed to the recovery of export volume, while domestic shipment volume is understood to have slightly decreased or remained similar to the previous year.

In particular, this year, the recovery of cement shipment volume (Q), the possibility of price increases (P), the operation of the recycling resource processing facility, and the flexible coal call option (C) are all expected to show favorable trends.

Researcher Song Yurim explained, "Last year, the building construction start area recorded 12.8% year-on-year growth, marking an increase for the first time in four years," adding, "With the concentration of increased construction start areas in the second half of the year, building material companies involved in the early stages of construction projects have been showing signs of performance improvement since early this year."

He emphasized, "Considering that there is about a one-year lag between building construction start area and cement shipment volume, the period when Q will increase significantly is estimated to be the second half of this year. Also, ongoing discussions with the ready-mixed concrete industry and P, the cement price increase, are raising expectations for performance."

Additionally, the expansion of Environmental, Social, and Governance (ESG) management and environmental business is evaluated as another pillar explaining Ssangyong Cement's stock valuation, alongside its advantage in dividends.

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