[Click eStock] "LG Sangsa, Continued Expectations for Earnings Improvement... Target Price Up 9%"

Hana Financial Investment Report

[Asia Economy Reporter Minji Lee] Hana Financial Investment maintained a buy rating on LG Sangsa and raised the target price by 9% from the previous level to 35,000 KRW.

Researcher Jaeseon Yoo of Hana Financial Investment explained, "Although logistics faced concerns due to the base effect of last year's record-high performance, a faster-than-expected earnings improvement is emerging. The exchange rate is also positive, and commodity prices are showing strength, with prices of thermal coal and palm oil, which have rapidly risen since December last year, being fully reflected in the earnings."

Hana Financial Investment expects first-quarter sales to reach 3.2 trillion KRW, a 29% increase year-on-year. Operating profit is projected to increase by 45.8% to 72.8 billion KRW compared to the previous year. The turnaround to profitability in energy and palm sectors and strong logistics performance are expected to contribute. Considering the continued significant rise in thermal coal and palm oil prices from the second half of last year until recently, positive earnings improvement is also anticipated in the second quarter.

Researcher Yoo stated, "Industrial materials and solutions are expected to see further improvement due to favorable exchange rate conditions and strong trading volumes. Despite rising market freight rates, logistics volume continues to increase steadily, leading to simultaneous improvement in margins and scale."

Heavy rains in Australia have disrupted production and transportation, causing Australian coal prices to strengthen, which is expected to impact Indonesian coal prices as well. Container freight rates are slightly adjusting from their peak, but cargo volume remains robust, and overall indicators suggest growing expectations for earnings. Researcher Jaeseon Yoo added, "After the group’s split, it will be possible to confirm the direction of new businesses, and positive stock price trends based on the outcomes can also be anticipated."

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