[Click eStock] "LX Inter Leads Energy and Farm Earnings... Also Attractive for High Dividends"

[Asia Economy Reporter Ji Yeon-jin] NH Investment & Securities announced on the 29th that it raised the target price for LX International from 39,000 KRW to 45,000 KRW, citing that the energy and palm (agriculture) businesses are driving performance and the logistics business continues to perform well.

Dongyang Kim, a researcher at NH Investment & Securities, stated, "LX International, a major subsidiary of LX, is expected to promote synergy within the newly established holding company based on strong performance momentum in the energy, palm, and logistics businesses, and to strengthen new eco-friendly and wellness businesses as well as shareholder value enhancement."

The company is expected to achieve an operating profit of 692 billion KRW this year, a 5% increase from the previous year, as raw material prices remain strong and logistics business performance improves. Since last year, the dividend per share is expected to be maintained at 2,300 KRW, with a dividend yield reaching 6.7%.

LX International plans to invest an average of 300 billion KRW annually in new businesses over the next four years. This includes a 20% equity investment in an eco-friendly plastic (PBAT) production corporation (36 billion KRW, production scheduled for 2024), and there is also a possibility of acquiring Hanglas and nickel mines. Researcher Kim added that uncertainties related to the 'exclusion of coal business investments' are expected to decrease through the expansion of eco-friendly businesses such as carbon emission rights.

LX International's first-quarter performance is expected to show sales of 4.3687 trillion KRW, a 19% increase year-on-year, and operating profit of 208.3 billion KRW, an 84% increase, surpassing market expectations. Researcher Kim said, "Despite the coal price adjustment at the beginning of the year, profits remain strong due to increased coal production in Indonesia, and the supply disruption of sunflower seed oil from Ukraine has led to a rebound in the substitute palm oil price, which positively impacts performance despite the rising exchange rate," adding, "With the coal price rebound in March and strong palm oil prices, visibility of energy and palm business performance in the second quarter has also improved."

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