[Click eStock] Korea Zinc, Standing Tall Amid Global Power Shortage

[Asia Economy Reporter Hwang Junho] Meritz Securities raised the target price of Korea Zinc to 650,000 KRW on the 7th.

Korea Zinc is the world's number one zinc smelting company, producing and selling metals such as zinc, lead, silver, and gold. Recently, based on stable cash flow from its core business, the company is seeking to expand into secondary battery material businesses such as copper foil, raising expectations for an increase in business value.

In its core business, the expansion of its Australian subsidiary SMC will be completed by the end of the year. From next year, a significant increase in sales volume is expected (from 220,000 tons per year to 300,000 tons). Zinc mine production is also on the rise, and due to the global power shortage crisis, there is a possibility that the operating rates of competing smelting companies may decline.

Researcher Moon Kyungwon of Meritz Securities said, "Despite the recent decline in some metal prices led by silver, a double-digit ROE is expected in 2022." However, he analyzed, "Currently confirmed secondary battery material businesses account for less than 5% of total company sales, and new investments have significant uncertainties in timing and scale, so the secondary battery business should still be considered as a 'plus alpha'."

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