[Click eStock] "Kumho Petrochemical, Treasury Stock Cancellation... Target Price Raised to 194,000 Won"

On the 7th, Kiwoom Securities raised the target price for Kumho Petrochemical, which decided to cancel its treasury shares, to 194,000 KRW. The investment opinion was maintained as a buy.

Jeong Kyung-hee, a researcher at Kiwoom Securities, explained, "Some signals of recovery in replacement tire demand, a consumer of synthetic rubber, have recently appeared in the North American and Chinese markets," adding, "Although this was not included in the estimates for further confirmation, considering recent product price changes and the cancellation scheduled for the 20th, we applied at least a 9.2% treasury share cancellation to raise the target price."

Kumho Petrochemical announced the day before that it decided to cancel 2,624,417 treasury shares over the next three years. This corresponds to half of the treasury shares held by the company (18.4%).

The total treasury shares to be canceled this year amount to 875,000 shares. The cancellation amount was calculated at a total of 129.0625 billion KRW based on the closing price on the 5th (147,500 KRW). The scheduled cancellation date is the 20th.

Researcher Jeong Kyung-hee analyzed, "Depending on the future general shareholders' meeting results, the cancellation of at least 50% of treasury shares, i.e., 9.2%, over three years, or 100% over two years, is considered a very positive issue for improving corporate value."

Kumho Petrochemical recorded an operating profit of about 360 billion KRW last year. Researcher Jeong Kyung-hee stated, "Replacement tire demand is expected to gradually recover," and "The timing of profitability improvement will also be ahead compared to other companies."

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