[Edaily Reporter Kim Hyung-il ] DB Securities projected that KoreaZinc(010130)will see only a limited decline in earnings in the second half of the year, thanks to portfolio diversification. The firm maintained its “Buy” rating and set a target price of 1.5 million won, down from its previous estimate.

On the 7th, Ahn Hoe-su, an analyst at DB Securities, stated, “Second-quarter consolidated revenue was 6.373 trillion won, and operating profit was 587 billion won, in line with the operating profit consensus,” adding “The positive surprise in consolidated revenue was driven by the performance of consolidated subsidiaries, with contributions from expanded metal sales at KZ Trading (formerly Seorin Trading), a recovery in production at Sun Metal Corporation (SMC)—an overseas affiliate of KoreaZinc—and increased scrap processing volumes at Pedal Point,” he analyzed.

He continued, “At KoreaZinc, standalone operating profit declined due to the recognition of inventory valuation losses at KZ Trading, a decrease in profits at SMC caused by falling silver prices, and the recognition of loss expenses at Pedal Point,” but explained, “This was partially offset by rising zinc prices, increased copper sales volume, and higher sales of rare metals.”

DB Securities predicted that while a decline in second-half earnings is inevitable due to the sharp adjustments in prices and exchange rates in the third quarter, as well as the decline in treatment charges (TC), the extent of the decline will be limited thanks to portfolio diversification. The firm explained that, based on KoreaZinc’s estimates, a 10-won fluctuation in the exchange rate would affect standalone operating profit by approximately 17 to 18 billion won.

Analyst Ahn stated, “While short-term volatility due to external factors is unavoidable, the company’s profit structure is improving through the strengthening of its high-value metal portfolio,” adding, “Profit levels are expected to rise to the next level starting in 2028 as germanium production and the expansion of copper production capacity (CAPA) are reflected.” He further noted, “The current stock price does not yet reflect new investments planned for 2028 and beyond.”