Securities Firms Raise Target Prices for Naver and Korea Zinc Amid 'Clear Earnings'

Buy Recommendation for Stocks with Expected Earnings Upgrade
Concerns from China Affecting AmorePacific
Solar Power Concerns Lead to Hanwha Solutions Downgrade

[Asia Economy Reporter Park Jihwan] The securities industry raised target prices and recommended buying stocks such as Naver and Korea Zinc, which showed upward revisions in earnings and expectations for business expansion. On the other hand, Amorepacific, facing growing concerns over sluggish performance in key markets like China, and Hanwha Solutions, expected to continue losses in its solar power business, saw their target prices downgraded.

According to financial information provider FnGuide on the 6th, from the 1st of last month to the 4th of this month, a total of 557 securities reports raised their target prices. The stock with the most upward target price revisions was Naver (15 reports). Securities firms focused on Naver's expanding influence across various sectors such as advertising, commerce, content, and cloud, which is driving sustained high revenue growth. In Q2 this year, Naver posted sales of 1.6635 trillion KRW and operating profit of 335.6 billion KRW, up 30.4% and 8.9% year-on-year, respectively. Annual operating profit is forecasted to increase 10.9% year-on-year to 1.3471 trillion KRW. The securities industry expects Naver's operating profit in 2023 to grow 1.67 times from now to 2.2449 trillion KRW. Choi Jinseong, a researcher at Cape Investment & Securities, said, "Monetization efforts are underway across all business divisions," adding, "Revenue growth is expected to continue alongside increased investment in new businesses."

Following Naver, Korea Zinc (13 reports), Cheil Worldwide (12 reports), Kia, Hyundai Glovis, DGB Financial Group, and S-Oil (10 reports each) had many upward target price revisions. Korea Zinc is positively evaluated for maintaining an upward earnings trend based on its stable zinc smelting business model and recently entering the secondary battery materials business, which provides future growth potential. Cheil Worldwide was highlighted for recording its highest-ever quarterly performance with a digital sales ratio approaching 50% of total revenue, reflecting a market-aligned strategy.

Conversely, there were 168 reports with downgraded target prices, with Amorepacific leading at 15 reports. Meritz Securities and Cape Investment & Securities also downgraded their investment opinions. Hanuri, a researcher at Meritz Securities, commented, "Visibility of performance in key channels such as China and duty-free has diminished, and momentum from the resumption of international flights and shopping events is also lacking," adding, "Marketing expenditures are increasing, but efficiency is unlikely to improve accordingly." Hanwha Solutions (14 reports) received negative evaluations due to expected continued losses in the second half caused by cost burdens in its core solar power business. Other companies with many negative evaluations included LG Household & Health Care and Lotte Chemical (9 reports each), and SK Hynix (8 reports).

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