[Edaily Reporter Kim Hyung-il ] HEUNGKUK METALTECH CO.,LTD. maintained its “Buy” rating and target price of 58,000 won for LX INTERNATIONAL CORP.(001120). This is because third-quarter operating profit rose 120.9% year-over-year, driven by strong performance in the logistics sector, and full-year operating profit is expected to continue its significant growth trend. The firm also highlighted the company’s efforts to secure new growth engines, such as investments in overseas mines.

On the 5th, Park Jong-ryeol, an analyst at HEUNGKUK METALTECH CO.,LTD., stated, “We expect LX INTERNATIONAL CORP. to return to a trend of annual operating profit growth this year,” adding, “Improved profitability across all business segments—including trading and new growth, logistics, and resources—will underpin earnings growth.” He continued, “In the logistics sector, profit growth is possible due to improved performance in the land logistics (CL) segment, despite the decline in the ocean freight rate index,” and added, “Profitability in the resources sector will also gradually improve, driven by the recovery in coal prices and favorable conditions in the palm oil market.”

Securing medium- to long-term growth drivers was also cited as a key challenge. LX INTERNATIONAL CORP. is exploring new business opportunities, including investments in overseas mines such as nickel and bauxite. HEUNGKUK METALTECH CO.,LTD. predicted that overseas mine investments are likely to gain momentum in the future and that the company will continue to take proactive steps to secure growth drivers.

LX INTERNATIONAL CORP. reported third-quarter consolidated revenue of 5.2 trillion won, a 15.1% increase year-over-year. Operating profit rose 120.9% to 143.1 billion won. These strong results exceeded initial forecasts; while the trading, new growth, and resources segments fell slightly short of expectations, operating profit in the logistics segment significantly exceeded expectations.

The logistics division posted strong results as rising ocean freight rates driven by escalating geopolitical risks coincided with increased cargo volumes. The trading and new growth division also achieved year-over-year profit growth, driven by increased trading profits due to improved resource market conditions, a reduction in LX Glass’s losses, and the maintenance of robust profitability at Posung Green Power and AKP.

In the Resources segment, improved coal market conditions and stable profit generation from the palm oil business drove the earnings improvement. Analysts note that continued profitability improvements across all business segments contributed to the increase in company-wide operating profit.

HEUNGKUK METALTECH CO.,LTD. forecasts LX INTERNATIONAL CORP.’s full-year consolidated revenue for this year at 18.9 trillion won and operating profit at 470 billion won. These figures represent year-over-year increases of 13.1% and 60.9%, respectively. While fourth-quarter performance is expected to slow compared to the previous quarter, the positive trend compared to the same period last year is expected to continue.

Analyst Park noted regarding LX INTERNATIONAL CORP., “It also offers attractive undervaluation,” adding, “Due to the sharp decline in the stock price since late April, the 12-month forward price-to-earnings ratio (PER) stands at 4.8x, and the price-to-book ratio (PBR) remains at 0.5x.” He added, “The target price was calculated using a sum-of-the-parts approach, and for the enterprise value, we applied an EV/EBITDA multiple of 4.1x, which represents a 22% discount to the 2019–2020 average.”