[Click eStock] "Pungsan, Surprise Earnings Expected Due to Copper Price Increase"

[Asia Economy Reporter Ji Yeon-jin] NH Investment & Securities announced on the 21st that it expects Pungsan's profits to improve due to the rebound in copper prices and concerns over the defense sector to ease, maintaining a target stock price of 50,000 KRW and a buy rating.

Byun Jong-man, a researcher at NH Investment & Securities, said, "Reflecting the profit improvement of the headquarters and overseas subsidiaries due to the rise in copper prices, we have raised the earnings per share (EPS) forecasts for this year and next year by 14.0% and 11.9%, respectively," adding, "This year's defense sector sales are expected to slightly decrease by 3.6% year-on-year to 682.1 billion KRW."

The LME copper price rose to an all-time high of $10,449 per ton on May 11 but fell 12.1% to $9,189 per ton on July 19 due to the Chinese government's intervention in the raw materials market. The Chinese government expressed concerns about excessive increases in raw material prices and announced plans to sell national reserve materials for copper, aluminum, and zinc.

Accordingly, the upper limit of copper prices in the second half of the year is expected to be $10,500 per ton. With strong copper demand centered on renewable energy, supply shortages are expected to continue due to sluggish capital expenditures (CAPEX) in addition to the virus situation.

Pungsan's consolidated sales for the second quarter of this year are expected to increase by 52.1% year-on-year to 882 billion KRW, and operating profit is projected to rise by 368.1% to 98.3 billion KRW. Net income attributable to controlling shareholders is estimated to surge 676.4% to 62.6 billion KRW. Researcher Byun explained, "Operating profit and net income attributable to controlling shareholders estimates are expected to exceed market consensus by 27.8% and 32.9%, respectively," adding, "The copper price applied to second-quarter sales rose 17.3% compared to the previous quarter, which likely significantly increased related profits."

Sales in the defense sector are estimated to increase by 2% to 184.4 billion KRW, maintaining the previous year's level.

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