"Focus on utilizing Samsung C&T stake" — KCC target price raised on shareholder return expectations

[Financial News] NH Investment & Securities maintained its Buy rating on KCC on the 22nd, expecting shareholder returns to gain momentum, and raised its target price from KRW 680,000 to KRW 730,000.
Lee Eun-sang, an analyst at NH Investment & Securities, said, "KCC presented a plan to utilize its stake in Samsung C&T through its corporate value enhancement plan on the 20th of last month." He added, "A special dividend from Samsung C&T will enable KCC to secure KRW 220 billion in funds for dividend payments."
He continued, "Although the plan to utilize its stake in Samsung C&T has for now been settled through the redistribution of the special dividend, the possibility of selling the stake to raise its overseas credit rating remains open. In addition, under its announced treasury-share plan, KCC plans to cancel 77% of its treasury shares by September next year. This represents 13% of its total shares outstanding."
KCC currently holds approximately 17.01 million shares of Samsung C&T, representing a 10.49% stake.
The analyst also highlighted improving profitability. Lee explained, "The silicon segment has entered a period of structural earnings recovery. KCC is reducing its mix of low-priced products and expanding its high-margin product lineup, while price increases are also being reflected."
He added, "With Dow's closure of its UK plant coinciding with Elkem's sale of its silicon business, the global silicon industry's supply chain is being reshaped. The silicon segment's operating margin is expected to improve to around 5% in the second half of this year."
[email protected] Seo Min-ji Reporter