[Click eStock] "LX International, Record Quarterly Earnings in Q3... Performance Momentum Through Next Year"

[Asia Economy Reporter Park Jihwan] NH Investment & Securities maintained its 'Buy' rating and target price of 39,000 KRW for LX International on the 8th, citing the company's record-high quarterly performance in Q3 this year.

Dongyang Kim, a researcher at NH Investment & Securities, stated, "The Q3 results exceeded market consensus," adding, "Strong performance momentum is expected to continue due to the logistics business's robust growth and the sharp rise in resource prices." He explained that following the spin-off, expansion into eco-friendly and wellness new businesses, the potential listing of LX Pantos, and an increase in dividends per share are anticipated.

LX International's Q3 results showed sales of 4.4948 trillion KRW and operating profit of 209.6 billion KRW, representing increases of 42% and 501% respectively compared to the previous year, significantly surpassing market consensus.

In particular, the performance momentum is expected to continue through next year. Researcher Kim emphasized, "As a major subsidiary of LX, LX International is expected to reduce the proportion of its coal business by leveraging strong performance momentum after the spin-off, promoting synergies within the newly established holding company, strengthening eco-friendly and wellness new businesses, and enhancing shareholder value."

Due to the continued strength in the logistics business and the sharp rise in raw material prices, operating profits for this year and next year are projected at 648.8 billion KRW and 632 billion KRW respectively, representing a 306% increase and a 3% decrease compared to the previous year. Researcher Kim stated, "With increased operating cash flow, the company plans to continue investing 300 billion KRW annually in new businesses over the next four years. Expectations include reduced uncertainty related to excluding coal business investments through acquisitions of nickel mines, resource recycling, carbon emission rights, eco-friendly power generation, and expanded distribution of COVID-19 diagnostic kits."

He emphasized, "Given the structural imbalance in coal supply and demand leading to the strong surge in Indonesian coal prices in October, the lagged reflection of profits and production increase plans suggest that the strong performance momentum will continue through next year."

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