[Click eStock] "Koryo Ayeon, Cost Burden Arises Due to Poor Performance... Target Price Down"

Yuanta Securities lowered the target price for Korea Zinc from 690,000 won to 640,000 won on the 5th.

Korea Zinc's operating profit for the first quarter of this year (separate basis) is estimated to be about 160 billion won, down 44% compared to the same period last year. However, it increased by 56% compared to the previous quarter. This is interpreted as a base effect, as the sales volume of metals such as zinc decreased by more than 10%, but major metal prices rose compared to the previous quarter. The won-dollar exchange rate was also relatively favorable, and the issue of high-priced raw materials that negatively affected the second half of last year was resolved, resulting in an increase in operating profit compared to the previous quarter.

However, on a consolidated basis, it is expected to record losses for three consecutive quarters. Nevertheless, the deficit is expected to have narrowed compared to the previous quarter.

Korea Zinc's performance may fluctuate depending on metal prices, exchange rates, and smelting fees, but basically, the smelting business has entered a stabilization phase rather than growth, and the annual operating profit (separate basis) is expected to be around 900 billion won in the future.

Hyunsoo Lee, a researcher at Yuanta Securities, said, "Korea Zinc is investing in new businesses such as renewable energy and recycling not only domestically but also overseas," adding, "Due to the nature of new investments, cost burdens are expected to occur until mass production is achieved."

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