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

[Asia Economy Reporter Lee Seon-ae] Kiwoom Securities announced on the 2nd that it maintains a 'Buy' investment rating on Hyosung Advanced Materials with an earnings surprise outlook and raises the target price from 468,000 KRW to 520,000 KRW.

Hyosung Advanced Materials is expected to record an earnings surprise with an operating profit of 75 billion KRW in the first quarter of this year, a 163.2% increase compared to the same period last year. For reference, this figure corresponds to 2.2 times the operating profit for the entire last year. This is due to the expected improvement in utilization rate and selling price of the core business segment, tire reinforcement materials, and the solid margin maintenance of other segments such as aramid and carbon fiber, along with the anticipated profitability improvement of the spandex plant in Vietnam.

Researcher Lee Dong-wook of Kiwoom Securities explained, "Based on the performance improvement, we have raised the target price and applied the SOTP valuation method," adding, "The target EV/EBITDA multiple is a 10% discount to the company's past three-year average (9.9 times)."

Hyosung Advanced Materials is the world's number one tire cord company, and considering that the average multiple of competing tire cord companies (Kordsa, Indorama Ventures) is 13 times, this is a reasonable figure. Meanwhile, the hydrogen-related premium has not yet been factored in. It will be reflected after official announcements and plans are received. For reference, the EV/EBITDA of Hexagon Composites, a hydrogen storage container company, is formed at 58.8 times.

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