"Profitability slows amid increased oil price volatility"...Hyosung TNC target price cut

[Financial News] NH Investment & Securities said on the 28th that it was maintaining its "Buy" rating on Hyosung TNC while lowering its target price from 470,000 won to 450,000 won in light of slowing profitability.
Choi Young-kwang, a researcher at NH Investment & Securities, said, "We lowered our operating profit forecast for next year by 5.4% to reflect the expanded volatility in oil prices and slowing profitability in nylon and polyester."
Third-quarter operating profit is expected to come in at 110.5 billion won, down 41.5% from the previous quarter and below the market consensus.
However, the report highlighted that key spandex indicators had begun to recover after the off-season. Utilization rates declined and inventory days increased in the third quarter because of seasonal weakness, but the current utilization rate has rebounded to 83%, while inventory days have also turned downward since the end of last month.
Choi said, "Key indicators in the spandex industry have recently been recovering, and nylon and polyester profitability is expected to improve gradually after the impact of sharp reverse lagging—margin contraction caused by the time lag in raw-material input—has passed." He added, "Given the expected improvement in earnings going forward, the current share price, which is at the lower end of the PBR band, is considered undervalued."

[email protected] Seo Min-ji Reporter