[Click eStock] LX International's Solid Performance... Impact of Rising Raw Materials and Freight Costs

[Asia Economy Reporter Myung-hwan Lee] Hana Financial Investment announced on the 22nd that it expects LX International to deliver earnings that exceed market expectations, maintaining a buy rating and a target price of 47,000 KRW.

Hana Financial Investment forecasted that LX International's first-quarter results will surpass market expectations. The company’s projected first-quarter revenue is 4.8 trillion KRW, a 30% increase compared to the previous year. Operating profit is expected to rise by 83.9% to reach 208.3 billion KRW. This growth is attributed to the impact of rising freight and raw material prices in the logistics and energy & palm sectors.

In the energy & palm sector, positive performance is anticipated due to strong market conditions for Australian thermal coal and palm oil, as well as increased mining production in Indonesia. Yu Jae-sun, a researcher at Hana Financial Investment, stated, "Prices for thermal coal used in power generation surged to record highs due to global supply chain disruptions and geopolitical risks in major exporting countries, but have recently entered a correction phase," adding, "The recently established high prices are expected to be fully reflected starting in the second quarter, allowing (LX International) to sustain a profit growth trend compared to the previous quarter."

In logistics, after strong container ship freight rates early in the year followed by a correction normalizing margins, performance is expected to improve compared to the previous quarter due to the base effect of one-time costs.

Researcher Yu said, "There is still plenty of time to assess the full-year 2022 performance," but expressed a positive outlook, stating, "At this point, there is considerable potential for improvement compared to last year."

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