[Click eStock] "Kumho Petrochemical's Low PBR Noted... Target Price Maintained"

"Short-term Trading Approach Available"

Mirae Asset Securities maintained a buy rating and a target price of 146,000 KRW for Kumho Petrochemical on the 30th, stating that the company "simultaneously meets the conditions of a low price-to-book ratio (PBR) multiple and net cash." The previous day's closing price was 125,400 KRW.

Kumho Petrochemical Headquarters

On the same day, Jin-ho Lee, a researcher at Mirae Asset Securities, said, "Due to slow earnings recovery, we have lowered this year's earnings forecast by 33.3%," but added, "We applied a 12-month forward PBR of 0.76, reflecting expectations for expanded shareholder returns."

Lee stated, "It is rare in the chemical industry to have both a low PBR multiple and net cash simultaneously. There is potential for stock price momentum due to government policies and expectations for China's economic stimulus measures. It can be approached as a short-term trading opportunity."

Kumho Petrochemical's operating profit for the fourth quarter of last year was 36.6 billion KRW, falling 45% short of market expectations. It decreased by 57% compared to the previous quarter. The factors behind the poor performance include sluggish year-end demand in the synthetic resin and phenol derivatives sectors and one-time costs (such as expansion in China). These sectors recorded operating losses of 11.5 billion KRW and 10.4 billion KRW, respectively.

The operating profit for the first quarter of this year is expected to be 67.2 billion KRW, an 84% increase from the previous quarter. The researcher added, "The business conditions will not change significantly compared to the fourth quarter. Most of the earnings improvement is due to the elimination of one-time costs and the completion of regular maintenance."

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