[Edaily Reporter Kwon Oh Seok ] IBK Investment & Securities announced on the 12th that it is maintaining its “Buy” rating on KOLON INDUSTRIES(120110)but lowering its target price from 100,000 won to 73,000 won.

Lee Dong-wook, an analyst at IBK Investment & Securities, stated, “Demand for modified polyphenylene oxide (mPPO) is expected to rise due to the simultaneous increase in artificial intelligence (AI) server shipments and the trend toward higher-specification printed circuit boards (PCBs). As data transmission speeds within servers increase, the need to reduce signal loss in circuit boards grows, so the adoption of mPPO—a low-dielectric-constant resin—is expected to expand in high-specification copper-clad laminates (CCLs)," he explained.
He added, “KOLON INDUSTRIES completed the expansion line at its Gimcheon Plant No. 2 last September and, at the time of the announcement, mentioned that it is supplying its entire production volume to global CCL manufacturers. Once full-scale mass production begins, sales of mPPO alone are expected to reach approximately 200 billion won.”
He further emphasized, “KOLON LIFE SCIENCE Inc., which supplies the raw materials, also plans to expand its PPO production capacity to 5,400 metric tons per year, targeting operation in the first half of 2027. As the utilization rate of the Gimcheon line increases in response to rising orders from existing customers, mPPO will establish itself as a business that generates additional profits from sources other than tire cord and petroleum resins.”
Previously, third-quarter operating profit fell to 40.2 billion won compared to the previous quarter, falling short of market expectations (49.2 billion won). This was attributed to cost pressures in core business segments, compounded by unfavorable exchange rate effects and rising freight rates that impacted export-oriented stocks.
Nevertheless, the analyst stated, “While we are lowering the target price to reflect the decline in Chonbang CCL and peer group price-to-earnings ratios, we maintain a ‘Buy’ rating given the company’s strong business portfolio,” forecasting that demand for mPPO and AI substrates will translate into earnings.