[Click eStock] "Unid, Potassium Carbonate Prices Rise and Sales Improve... Target Price Up"

Published 12 Jul.2024 08:46(KST)

On the 12th, SK Securities raised the target price of Unid, an OCI affiliate, to 125,000 KRW. The analysis indicates that profitability is improving due to the rising price of the main product, potassium hydroxide, and sales volume is also increasing thanks to strong exports.

Unid Ulsan Factory Exterior View

Kim Dohyun, an analyst at SK Securities, estimated, "Unid's profits likely increased significantly in the second quarter due to the strong price of potassium hydroxide and increased domestic and international shipments." Reflecting this, Unid's sales are expected to have reached 298.2 billion KRW, up 17.1% from the previous quarter, and operating profit to have increased by 31.2% to 36.1 billion KRW. Compared to the same period last year, sales decreased by 1%, while operating profit surged by 336.7%.

Analyst Kim forecasted that Unid will continue its performance improvement trend in the second half of the year. He expects the margins (spread) of key products such as potassium hydroxide and potassium carbonate to remain stable, and profits to increase due to the new operation of facilities in China. He said, "After the facility expansion, profits will increase substantially in the fourth quarter," adding, "Given supply and demand conditions, short-term downward pressure on potassium hydroxide prices will be limited."

He also noted, "Potassium hydroxide exported from Korea to Europe increased by 128% year-on-year in May alone," explaining, "Exports continue to rise due to reduced operating rates and weakened competitiveness of facilities in the European region." Furthermore, he predicted, "Next year, new markets such as water electrolysis will be created, causing explosive growth in potassium hydroxide demand, which will drive performance growth."