[Click e Stocks] "Hankook Tire, Raised Earnings Expectations... Target Price Up"

Shinhan Investment Corp. on the 2nd raised the target price for Hankook Tire & Technology from 46,000 KRW to 52,000 KRW, expecting profitability to continue through the first half of next year. The investment rating was maintained as 'Buy.'

Jung Yong-jin, a researcher at Shinhan Investment Corp., explained, "With the cost structure of tire manufacturers normalizing, and the increased selling prices expected to continue through the first half of next year, we have raised our earnings estimates."

Hankook Tire & Technology achieved strong results in the third quarter of this year. Third-quarter sales increased by 2% year-on-year to 2.3 trillion KRW, and operating profit rose 106% to 396.4 billion KRW. Researcher Jung said, "Operating profit exceeded market expectations by 48%, and the operating margin reached 16.9%, quickly approaching the peak levels seen in early 2016. Although total sales volume remained fixed, a combination of mix, region, and cost factors enabled significant margin improvement."

There is a forecast that such strong performance can continue if cost and selling price conditions are maintained. Researcher Jung stated, "Despite rising oil prices, the price trend of rubber, a major raw material for tires, has been relatively stable. If cost increases are minimal and selling prices are maintained, the current strong performance can be structurally sustained." He added, "At this point, due to a tight supply environment, top-tier manufacturers tend to maintain their selling prices, leading us to raise our profitability outlook through the first half of next year."

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