[Click e-Stock] "Hyosung TNC Q1 Operating Profit Surpasses 70% of Last Year's Annual Net Income... Target Price Up 50%"

[Asia Economy Reporter Park Jihwan] Kiwoom Securities maintained a 'Buy' rating on Hyosung TNC on the 25th, expecting an earnings surprise in the first quarter results this year, and raised the target price by 50% from the previous 600,000 KRW to 900,000 KRW.

Researcher Lee Dongwook of Kiwoom Securities explained, "Operating profit for the first quarter of this year is expected to be 190.4 billion KRW, significantly exceeding market expectations," adding, "This figure surpasses 70% of last year's annual operating profit." Operating profit in the textile division is expected to increase by 162.0% year-on-year to 176.6 billion KRW. Operating profit in the trade and other divisions is forecasted to rise by 24.6% year-on-year to 13.8 billion KRW.

It is also analyzed that the profit growth trend will continue in the second quarter of this year due to the decline in BDO prices. Operating profit for the second quarter is expected to be 209.5 billion KRW, continuing the quarterly profit growth trend. The researcher stated, "The restart of BDO plants, which had experienced some production disruptions, is anticipated, and the price of BDO (the main raw material) is expected to fall due to decreased demand for heating coal."

The financial structure is rapidly stabilizing as well. Despite additional investments in spandex and Quanzhou NF3, the net debt ratio, which exceeded 360% in 2018, is projected to decrease to 77.5% this year, falling below 100%.

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