[Click e-Stock] "HS Hyosung Advanced Materials, Target Price Raised... Carbon Fiber Performance Expected to Rebound"

On February 3, IBK Investment & Securities raised its target price for HS Hyosung Advanced Materials to 300,000 won (+25%) and maintained its "Buy" recommendation, stating that this year, the company’s carbon fiber business is expected to enter a recovery phase.

Lee Dongwook, a researcher at IBK Investment & Securities, said, "As the power market continues to boom, companies are ramping up capacity, which is expected to drive increased demand for power infrastructure products such as cable cores. In the aerospace sector, the combination of rising demand for commercial aircraft and ongoing increases in defense budgets is likely to sustain the market’s structural growth momentum," forecasting improved carbon fiber performance.

He also noted that global signals of carbon fiber price hikes are favorable for the anticipated rebound. Lee explained, "Toray Industries, the world’s top producer, raised prices for carbon fiber and intermediate materials such as prepreg by 10–20% starting January 1. This not only allows HS Hyosung Advanced Materials to justify higher costs in negotiations with customers, but also strengthens its bargaining power by establishing a new global price reference."

Lee added, "Carbon fiber is not just a single material; price signals are linked across the entire value chain, including prepreg, intermediate materials, and pressure vessels. Therefore, the impact of this price reference reset is expected to be significant. In addition, Jilin Chemical Fiber, one of China’s major players, has raised prices for its main wet-process 12K and 3K products by 5,000 yuan and 10,000 yuan per ton, respectively, to secure profitability."

He further stated that industry conditions are set to improve as restructuring and tighter regulations are occurring simultaneously on the supply side. Major overseas competitors such as SGL Carbon are discontinuing non-core businesses and shutting down production in Portugal and the United States as part of restructuring, while Mitsubishi Chemical has also mentioned rationalizing its carbon fiber operations. Lee said, "In China, many general-purpose T300-grade producers are halting operations due to electricity costs, and under the 'dual carbon' (carbon peak and carbon neutrality) policy, small factories lacking environmental mitigation equipment are facing forced closures or hefty fines."

He continued, "HS Hyosung Advanced Materials is reducing its exposure to China while expanding its presence in Vietnam through next year, thereby securing additional potential for improved results. About 80 new certifications are currently in progress, with most results expected to be received in the first half of this year." He added, "Based on this, the company’s entry into the high-value-added space and aerospace markets is also expected to become more visible."

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