[Infostock Daily= Reporter An Hoe Hyun] Kiwoom Securities predicted on the 26th that Hyosung TNC, a chemical textile and trading company, will outperform market expectations in the third quarter with strong performance in the textile sector such as spandex. As a result, the company maintained its investment opinion 'Buy' and raised its target stock price by 4.76% from 210,000 won to 220,000 won.
"Operating profit in the textile sector is 55.8 billion won, up 64 billion won from the previous quarter and is expected to turn to a large surplus," the company said, adding, "Amid the effect of improving the cost of spandex due to stabilizing prices of major raw materials such as Butanediol(BDO), demand for mask and protective clothing is increasing and the operation rate of the company's spandex plants is improving."
While China's spandex supply has increased only slightly, the increase in global spandex usage due to COVID-19 is also a positive factor for the company.
"There is no large-scale investment plan decided in the medium-term after the investment in India's spandex plant, so the burden of facility investment costs(Capex) will be reduced in the future," the company said. "In addition, the amount of net borrowing is expected to decrease gradually due to the recovery of the spandex industry after the second half of this year," the company said, while maintaining the Buy of investment opinion and slightly raising the six-month target stock price to 220,000 won.
Reporter An Hoe Hyun ahh@infostock.co.kr
