LX International's Logistics Business to Drive Earnings Improvement... Target Price Set at 66,000 Won

[Financial News] Hana Securities forecast that LX International will maintain solid earnings momentum in the second half, supported by improved performance in its logistics business and rising energy and raw material prices. The brokerage maintained its Buy (BUY) recommendation and target price of 66,000 won.
LX International's previous-day closing price was 40,400 won, implying approximately 63.4% upside to the 66,000-won target price.
On the 30th, Hana Securities forecast that LX International's third-quarter operating profit would reach 136 billion won, up 109.8% from a year earlier and exceeding market expectations.
Revenue is expected to rise 12.8% year on year to 5.1 trillion won. Yoo Jae-seon, a researcher at Hana Securities, said, "While the negative impact of the decline in the won-dollar exchange rate will be limited, rising energy and raw material prices and strong ocean freight rates will support earnings improvement."
By business segment, profitability at the GAM mine is expected to improve in the Resources segment on the back of higher coal prices, despite a decline in coal production.
Yoo said, "The palm business may experience a temporary slowdown in earnings as sales decline from the previous quarter due to logistics disruptions caused by El Niño. However, given favorable market conditions, performance should normalize afterward."
The logistics segment is expected to maintain solid earnings momentum, supported by higher freight rates in major regions and a recovery in demand for electronics. In particular, rising ocean freight rates are expected to serve as a key driver of earnings improvement.
In the Trading and New Growth segment, the peak-season effect in IT product trading and a recovery in subsidiary performance are expected to partially offset the decline in contracted coal volumes.
Hana Securities estimated LX International's annual operating profit at 529.2 billion won this year and 596.3 billion won next year. The brokerage noted that the company has strengthened its ability to respond to risks from rising energy and raw material prices while securing a stable earnings base in its logistics business.

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