[Click eStock] "Hansol Paper, Price Increase ↑· Freight Cost Burden ↓... Performance Recovery Accelerates"

[Asia Economy Reporter Kwon Jae-hee] Heungkuk Securities on the 27th newly issued a 'Buy' investment rating and a target price of 21,000 KRW for Hansol Paper. This is based on the expectation that the earnings turnaround trend will strengthen with industrial paper as the mainstay in the second quarter and the second half, along with the profitability recovery of printing paper and specialty paper.

Hansol Paper has been on a recovery trend since the fourth quarter of last year, which further expanded in the first quarter of this year. Hansol Paper's consolidated operating profit for the first quarter increased by 54.9% year-on-year to 24.6 billion KRW. The earnings improvement was led by industrial paper, with the profitability turnaround of specialty paper.

Good earnings momentum is expected to continue in the second quarter and the second half. This is because it is expected that the solid operating profit generation from industrial paper will be complemented by the profitability turnaround of specialty paper and printing paper.

Jong-ryeol Park, a researcher at Heungkuk Securities, said, "Until last year, it was difficult to pass on cost increases, and there was a cost burden due to the rising international pulp prices, but this year, earnings recovery is accelerating due to price increases in both domestic and export markets across all product types. The previously concerning sea freight rates have peaked out, so the freight burden is expected to ease in the second half, and additional product price increases are also anticipated, making solid earnings possible," he analyzed.

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