[Click eStock] "Korea Zinc, Metal Prices Continue to Decline...Target Price Down"

[Asia Economy Reporter Hwang Yoon-joo] Hana Securities analyzed on the 13th that the decline in metal prices is expected to continue for Korea Zinc, and the uncertainty of the business environment in the second half of the year will expand. Accordingly, they maintained a "Buy" rating but lowered the target price to 620,000 KRW.

Researcher Park Seong-bong of Hana Securities stated, "Operating profit for the second quarter is expected to reach 361.3 billion KRW, a 32.3% increase compared to the previous year, and sales are projected to increase by 26.6% to 3 trillion KRW."

Researcher Park explained, "Due to increased sales volume, a rise in zinc concentrate Spot T/C (spot smelting charge), the won-dollar exchange rate increase, and an overall rise in metal selling prices, operating profit is expected to exceed the market consensus of 346.9 billion KRW."

However, the decline in metal prices is expected to continue, making the outlook for the business environment in the second half of the year bleak. This is due to the LME industrial metal prices peaking in mid-April and continuing to decline recently. Zinc prices peaked at around 4,500 USD per ton in mid-April and recently recorded 3,151 USD.

Factors such as accelerated interest rate hikes in major countries including the United States, the strength of the US dollar, concerns over global economic slowdown, city lockdowns in China, and speculative capital outflows have influenced this trend.

Researcher Park said, "The US's ongoing interest rate hike policy and weakening economic indicators will continue to negatively affect industrial metal prices," and analyzed, "The continued rise in European electricity prices will reduce refined zinc supply, supporting the downside of zinc prices."

He added, "On average in the third quarter, major metal prices for Korea Zinc, including zinc, are expected to fall sharply compared to the second quarter, which will act as a cause of profitability deterioration."

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