The chemical sector faces headwinds globally, yet one Korean petrochemical giant is drawing positive attention from analysts who see significant growth potential. Korea Investment & Securities has maintained their “Buy” recommendation for Kumho Petrochemical (011780) while raising their target price from 150,000 won to 170,000 won – suggesting a potential 47% upside from the current share price of 115,800 won. What’s driving this confidence in a traditionally cyclical industry?
Synthetic Rubber Division Leads Profit Recovery
The company’s synthetic rubber segment is expected to show remarkable improvement in Q1 2025, driving overall corporate performance.
- Q1 2025 operating profit is projected at 86 billion won ($60.6 million at current exchange rates), representing a 10% year-on-year increase
- The synthetic rubber division specifically is forecast to deliver 39.5 billion won ($27.8 million) in operating profit, a substantial 57% increase from the previous year
- Analysts attribute this growth to successful price increases and positive lagging effects, with the division’s operating margin rebounding to 5%
Synthetic Resin Returns to Profitability
After a challenging period, the synthetic resin segment is expected to turn profitable despite difficult market conditions.
- The synthetic resin division is projected to record an operating profit of 4.4 billion won ($3.1 million) in Q1
- This return to profitability comes during persistently difficult market conditions, highlighting management’s effective operational strategies
- Strong sales of ABS (Acrylonitrile Butadiene Styrene) products have been cited as a key driver of this recovery
Mixed Performance Across Other Business Units
Not all divisions are showing equal strength, with some segments continuing to face challenges.
- The EPDM·TPV business division is expected to see its operating profit decrease by 24% to 17.6 billion won ($12.4 million)
- The phenol derivatives segment continues to struggle, with operating losses projected at 7.5 billion won ($5.3 million)
- These performance discrepancies highlight the importance of Kumho’s diversified business structure during uncertain economic times
Navigating Global Economic Headwinds
The company faces potential challenges from broader economic concerns but maintains strong fundamentals.
- Increasing concerns about economic slowdown due to U.S. tariff disputes are casting shadows over the chemical industry outlook
- Kumho Petrochemical must closely monitor potential demand decreases resulting from these global tensions
- Despite these uncertainties, the company’s valuation at 2025F PBR 0.5x is considered an attractive buying opportunity by analysts
Researcher Choi Go-un emphasizes Kumho Petrochemical’s differentiated profit momentum in a challenging environment, recommending it as a top pick that investors “can most comfortably believe in.” The question remains whether the company can continue to deliver this outperformance if global economic headwinds intensify.
Keywords
Kumho Petrochemical, synthetic rubber, petrochemical industry, Korea Investment & Securities, chemical sector
Hashtags
#KumhoPetrochemical #ChemicalStocks #KoreanStocks #InvestmentOpportunity #SyntheticRubber
한국어 요약
- 한국투자증권은 금호석유화학(011780)에 대해 ‘매수’ 의견을 유지하며 목표가를 15만원에서 17만원으로 상향 조정, 현재 주가 11만 5800원 대비 47% 상승 여력 제시
- 2025년 1분기 영업이익은 860억원(전년 대비 10% 증가) 전망, 특히 합성고무 부문은 395억원으로 57% 증가 예상
- 합성수지 부문은 ABS 판매 호조로 44억원 흑자 전환, EPDM·TPV는 176억원(24% 감소), 페놀유도체는 75억원 적자 지속 전망
- 미국 관세 분쟁으로 인한 경기 둔화 우려에도 불구하고, 애널리스트는 금호석유화학의 차별화된 이익 모멘텀을 강조하며 2025F PBR 0.5배 수준은 매수 기회로 평가