[Click eStock] Korea Zinc, Expected Benefit from Strong Zinc Prices

[Asia Economy Reporter Hwang Junho] Hana Financial Investment maintained the target price of Koryo Zinc at 680,000 KRW on the 6th, expecting benefits from the rise in metal prices.

Koryo Zinc's operating profit for the first quarter of this year is expected to exceed market expectations. Hana Financial Investment estimated Koryo Zinc's consolidated sales and operating profit for the first quarter of this year at 2.8 trillion KRW and 311.3 billion KRW, respectively. The operating profit consensus is 295.5 billion KRW. The strong first-quarter performance is expected despite a decrease in product sales volume, due to increases in zinc concentrate smelting fees, the KRW-USD exchange rate, and metal selling prices.

Zinc prices have been rising since the fourth quarter of last year, supported by inflationary trends. Additionally, with the Russia-Ukraine situation causing further increases in energy prices, the LME zinc price recently reached $4,332 per ton, approaching the highest level recorded in 2006.

With global zinc concentrate supply expected to expand, zinc concentrate spot smelting fees have also risen sharply this year, recently reaching $175 per ton. Considering this, Hana Financial Investment's analysis suggests that zinc concentrate smelting fees, which sharply declined to $159 per ton last year, are expected to increase to around $175?200 per ton this year.

Researcher Park Seongbong of Hana Financial Investment stated, "Following last year, benefits from strong metal prices are expected again this year, and if the battery foil plant scheduled for completion in the fourth quarter of this year is completed as planned, it is expected to contribute to profitability improvement."

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