[Edaily Reporter Kwon Oh Seok ] DaishinSecurities announced on the 22nd that it is maintaining its “Buy” rating on Hyosung(004800)but lowering its target price from 300,000 won to 200,000 won.

Lee Kyung-yeon, an analyst at DaishinSecurities, stated, “The downward revision of the target price reflects the decline in the value of our equity holdings due to falling stock prices of subsidiaries,” adding “We applied a target discount rate of 68% to the NAV (net asset value) of 10.4 trillion won, which is the sum of the equity value of listed and unlisted subsidiaries (9.48 trillion won), the Anyang plant site (411 billion won), and the value of royalty income (1 trillion won),” he explained.
By segment, Hyosung’s standalone revenue is estimated at 133 billion won (+2.9% year-over-year), with operating profit at 64 billion won (-35.4%). For Hyosung T&S, revenue is projected at 408 billion won (+17.9%) and operating profit at 39 billion won (+3.2%), indicating an improvement in operating profit on both a quarterly and annual basis.
In addition, FMK is projected to post revenue of 56 billion won (+2.1%) and an operating loss of 2.5 billion won, continuing its deficit, while Good Springs is expected to report revenue of 58 billion won (-17.5%) and operating profit of 4.5 billion won (-24.3%); the firm anticipates that the temporary uptick in the first quarter due to the start of nuclear power plant construction will see a slight correction in the second quarter.
The analyst stated, “HYOSUNG CHEMICAL, whose trading has resumed, is expected to benefit indirectly from disruptions in crude oil supply and demand caused by the blockade of the Strait of Hormuz. New orders are expected to increase due to its production structure that uses propane gas instead of naphtha for polypropylene (PP)," adding, "Consequently, the trend toward returning to profitability seen in the first quarter is expected to continue into the second quarter. While expectations that HYOSUNG CHEMICAL will maintain profitability are providing short-term momentum, its lower stock price will actually highlight its investment appeal as a high-dividend stock."