[Click eStock] "Hankook Tire, Q1 Earnings Consensus... Fire Impact Minimal"

Korea Investment & Securities Report

Korea Investment & Securities forecasted that Hankook Tire & Technology's first-quarter earnings will meet consensus expectations. Accordingly, it maintained both the investment opinion of 'Buy' and the target price of 53,000 KRW.

On the 13th, Jinwoo Kim, a researcher at Korea Investment & Securities, stated, "Hankook Tire & Technology's first-quarter operating profit is expected to be 201.3 billion KRW, exceeding the consensus by 1.2%," adding, "Although production volume is decreasing, sales volume is expected to increase compared to the same period last year through inventory sales, and prices will continue to rise reflecting the price hikes."

Researcher Kim judged that the fire that occurred last March will have a minimal impact on the first-quarter earnings. Since investigations by relevant authorities are ongoing and the scale of losses has not been determined, it is highly likely that the first-quarter results will not reflect these losses. However, from the second quarter onward, disaster losses are expected to be recorded as non-operating expenses, and after the loss adjustment period, insurance income is anticipated to be recognized as non-operating income from the fourth quarter onward.

The production disruption at the Daejeon plant caused by the fire is expected to be resolved in the short term through increased operating rates at the Geumsan plant and inventory sales, in the medium term by transferring volume to overseas plants, and in the long term by establishing new facilities.

Researcher Kim said, "The stock price, which was rebounding from the bottom, faced negative factors and underwent a correction," adding, "With uncertainties related to executive embezzlement and breach of trust reduced, the losses caused by the fire are at a manageable level."

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