[Click eStock] Hyosung Advanced Materials, Q1 Earnings Surprise 'Target Price Up'

[Asia Economy Reporter Lee Seon-ae] Kiwoom Securities announced on the 15th that it maintains a buy rating on Hyosung Advanced Materials and raises the target price by about 9% to 468,000 KRW, considering improved earnings.

Hyosung Advanced Materials' operating profit for the first quarter of this year is expected to reach 65.1 billion KRW, a 128.5% increase compared to the same period last year, significantly exceeding the recently sharply raised market expectations of 46.3 billion KRW. This is due to anticipated improvements in the selling price and operating rate of the core business segment, tire reinforcement materials, and the continued strong profitability of other segments such as aramid and carbon fiber, along with expected spread increases at the Vietnam spandex plant.

In the first half of this year, the mechanical completion of the aramid expansion facility will be achieved. The effect of the expansion (from 1,250 tons to 3,750 tons) is expected to be fully reflected starting in July. Although the production capacity is 3,750 tons, actual production volume may further improve through process enhancements. Aramid is used to reinforce stiffness by blending with nylon in the cap ply part of tires for electric vehicles. Researcher Lee Dong-wook of Kiwoom Securities stated, "With the increase in demand for 5G optical cables and the expansion of the electric vehicle market, the company's aramid expansion will be immediately absorbed, positively impacting the company's performance in the second half of the year."

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