[Edaily Reporter Shin Ha-yeon ] Shinhan Investment Securities projected that LX INTERNATIONAL CORP.(001120)will continue its solid earnings momentum in the second half of the year, following second-quarter results that met market expectations. The firm also noted that a revaluation could occur if the company’s plans to acquire bauxite and nickel mines in Indonesia materialize. It maintained its “Buy” rating and target price of 66,000 won.

Han Seung-hoon, an analyst at Shinhan Investment Securities, stated, “The company is pursuing the acquisition of a bauxite mine in Indonesia, which is estimated to be of a similar scale to the AKP mine in terms of value.” He added, “Regarding the concurrent acquisition of a new nickel mine, the company is reviewing assets larger than AKP, so a valuation re-rating can be expected if the acquisition plans materialize.”

LX INTERNATIONAL CORP.’s second-quarter consolidated operating profit was 117.8 billion won, up 114.2% year-over-year and in line with the market consensus (116.8 billion won). Revenue rose 24.7% to 4.7763 trillion won.

Operating profit in the Resources segment reached 21.6 billion won, a 148.3% increase year-over-year. Improved palm oil market conditions driven by rising energy prices, higher selling prices for nickel ore from the AKP mine, and increased production volume drove the improvement in earnings. However, reduced production at jointly developed coal mines and higher mining costs due to rising oil prices acted as partial headwinds.

Operating profit in the Trading and New Growth segment reached 45.2 billion won, a 296.5% increase compared to the same period last year. Market conditions for major trading commodities, such as methanol and coal, improved. Additionally, the logistics segment recorded an operating profit of 51.0 billion won, driven by increases in ocean freight rates and cargo volume resulting from preemptive cargo shipments and inventory buildup ahead of the Strait of Hormuz blockade and the implementation of additional U.S. tariffs.

One analyst projected that this year’s full-year operating profit would reach 511.2 billion won, a 74.9% increase from the previous year. He noted, “Substitute demand for LNG and increased cooling demand due to El Niño will support the floor of thermal coal prices in the second half of the year,” adding, “The impact of higher ocean freight rates on earnings will peak in the third quarter due to a lag effect.”

He continued, “With a price-to-earnings ratio (PER) of 4.3x and a price-to-book ratio (PBR) of 0.42x, the stock remains in a highly attractive valuation range,” adding, “The expected dividend yield is in the 7% range, and the appeal of the dividend is expected to become more prominent as the year-end approaches.”