[Edaily Reporter Park Jeong-soo] On the 4th, Daol Investment & Securities maintained its “Buy” rating on #KoreaCarbon, citing expectations for improved earnings driven by expanded orders for LNG ship insulation materials and the full-scale launch of mass production in the defense sector. The firm raised its target price by 7.0% from 57,000 won to 61,000 won. The closing price on the 2nd was 31,200 won.
Choi Gwang-sik, an analyst at Daol Investment & Securities, stated, “The company has abundant momentum, including orders for NO96 SUPER+, the start of mass production for defense projects, investment in the Miryang Industrial Complex, and the establishment of a U.S. subsidiary,” adding, “A stock price correction presents a buying opportunity.”
First-quarter earnings also exceeded market expectations. Korea Carbon’s first-quarter operating profit reached 41.1 billion won, a 32.0% increase year-over-year, surpassing the consensus estimate. Improved profitability was driven by rising average selling prices (ASP), favorable exchange rates, and enhanced productivity from new facilities.
In particular, the growth potential of the LNG carrier insulation business was highlighted. In May, Korea Carbon secured an order worth 72 billion won for insulation materials from Hanwha Ocean. Daol Investment & Securities estimated that this order is for the “NO96 SUPER+” next-generation LNG carrier insulation system and projected that it would serve as a catalyst for expanding its customer base beyond the market previously dominated by Samsung Heavy Industries and HD Korea Shipbuilding & Offshore Engineering.
The defense business has also entered a phase of full-scale profit generation. Korea Carbon began mass production of defense components last year, and an expansion in the supply of carbon materials used in the Cheon-gung guided missile and the KVLS-2 vertical launch system is anticipated. Defense sales are expected to grow from the 10 billion won range last year to the 30 billion won range this year, and to the 50 billion won range by 2027.
Investment in the Miryang National Nano-Convergence Industrial Complex was also cited as a growth driver. The company plans to invest a total of 100 billion won to expand its SB production capacity from the current 80 units to 100 units. It is also expected to enhance cost competitiveness through the introduction of automated equipment.
Earnings improvements are expected to become more pronounced starting in 2027. Daol Investment & Securities projected Korea Carbon’s 2027 revenue at 961.3 billion won and operating profit at 199.3 billion won. The firm analyzed that the full impact of price hikes for LNG ship insulation materials will be reflected, and the profit contribution from the defense business will expand.
Analyst Choi stated, “While there will be some impact from recent increases in raw material prices, this can be offset by improved productivity and increased defense sales,” adding, “A steep trend of earnings improvement is expected to continue through 2027–2028.”