[Market Focus] Daehan Chemical Hits Record High on Expectations of Second-Half Return to Profitability

Daehan Chemical is showing strong performance in early trading.

As of 9:03 a.m. on August 26, Daehan Chemical was trading at 121,100 won, up 7.64% (8,600 won) from the previous day, marking a new 52-week high.

Investor sentiment appears to have been boosted by a series of securities industry forecasts predicting that Daehan Chemical will return to profitability in the second half of the year. Hwang Kyuwon, a researcher at Yuanta Securities, stated, "The third quarter of 2025 will be a pleasant turning point. The company's estimated sales for 2025 are 3.4 trillion won, with operating profit of 41.4 billion won, signaling a return to profitability for the first time since 2021." He added, "In particular, the expected operating profit for the second half of the year is 55.9 billion won, making it highly likely that the company will escape the operating loss of 14.5 billion won recorded in the first half."

He cited three fundamental positive factors: normalization of the operating rate of the naphtha cracking center (NCC), a significant reduction in depreciation, and profit contributions from the liquefied natural gas (LNG) power plant. He emphasized that Daehan Chemical is expected to be the fastest among pure NCC companies in Korea to return to profitability.

Yoon Jaesung, a researcher at Hana Securities, also noted, "The possibility of improved market conditions has increased due to intensive restructuring in the global petrochemical industry, including China." He highlighted that Daehan Chemical’s NCC operating rate stood at a very high 94.5% in the second quarter, compared to competitors (70-80%), and that the company maintains an absolutely sound financial structure with a debt ratio of 31%. He projected that free cash flow (FCF) for 2025-2026 will reach between 90 billion and 170 billion won, making it highly likely that the company’s net borrowings of 167 billion won (as of the second quarter of this year) will turn into net cash by the end of 2026.

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