[Click eStock] "Kolon Industries Accelerates Performance Improvement Across All Business Divisions"

[Asia Economy Reporter Park Jihwan] Kiwoom Securities maintained its 'Buy' rating and target price of 100,000 KRW for Kolon Industries on the 31st, stating that performance improvements across all business divisions are accelerating.

Researcher Lee Dongwook of Kiwoom Securities said, "Kolon Industries' operating profit for the second quarter of this year is expected to reach 87.8 billion KRW, a 138.8% increase compared to the same period last year," adding, "Performance improvements are anticipated across all business divisions including industrial materials, fashion, chemicals, films & electronic materials, and others, supported by the peak season effect in industrial materials and fashion."

Operating profit from industrial materials is expected to be 43.1 billion KRW, a 326.7% increase compared to the same period last year. The strong performance is expected to accelerate following the first quarter. The researcher explained, "The tight supply and demand situation for key products such as tire cords and aramid continues, while subsidiaries related to automotive materials and parts like Kolon Plastics and Kolon Glotech are also showing simultaneous profit increases," adding, "Performance improvements are expected from the tire cord and airbag corporations in Vietnam and China."

Chemical operating profit is expected to be 20.1 billion KRW, with an operating margin of about 10%. Although initially conservative due to intensified competition in petroleum resins, raw material price increases and demand growth have led to price hikes for petroleum resins by Exxon, Eastman, and the company. The differentiated petroleum resin expansion (13 million tons) is expected to be fully reflected in commercial operations starting from the second quarter.

Operating profit from films and electronic materials is expected to be 14.6 billion KRW, a 151.0% increase compared to the same period last year. Demand for packaging films remains solid, and the ongoing portfolio improvement effects are being realized. Regarding DFR, it was explained that not only the domestic but also the China Huizhou corporation continues to show strong performance.

In the fashion division, operating profit is expected to be 9.5 billion KRW, a 41.7% increase compared to the same period last year. As it is a semi-peak season, the scale (such as outdoor products) is expanding, leading to fixed cost reduction effects. The researcher said, "The sales proportion of highly profitable golf apparel, accessories, and clubs is rapidly increasing from 10% to over 20%."

While the annual operating profit for this year is expected to increase by 101.8% compared to last year, expansions in hydrogen materials, aramid, and tire cords, as well as the establishment of eco-friendly plastic plants, are anticipated to drive mid- to long-term performance.

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