[Infostock Daily= Reporter An Hoe Hyun] NH Investment & Securities predicted on the 26th that HanKuk Carbon will see a surge in order backlogs this year as the environment for ordering LNG carriers is normalized. Efforts to explore new markets such as LNG storage materials for ships and advanced materials related to automobiles, aviation and railways are also positive. It maintained its investment opinion ‘Buy’ and raised its target stock price by 25%(KRW 3,000) from KRW 12,000 to KRW 15,000.
HanKuk Carbon was founded in September 1984 as a manufacturer of carbon fiber and synthetic resins. Since then, it has entered the LNG insulation market for ships and has dominated the insulation market for ships with its rival Dongsung Finetec. Sales in 2019 recorded 273.4 billion won and operating profit of 25.4 billion won(9.3% of operating profit ratio). The proportion of sales by product consists of LNG insulation(76%) for ships, glass fiber sheets(12%) and carbon (6%).
Recently, the company is expanding operations and investing in facilities to expand the supply of composite materials to manufacturers of automobiles · aircraft · railway vehicles to reduce dependence on LNG insulation for ships and find new growth engines.
Unlike sales, it is expected to reach a record high this year in terms of order backlogs. Since the fourth quarter, Korean shipbuilders have recorded large-scale orders and related trickle-down effects will take place in the first half of the year. Since then, the company is likely to further expand its order backlog due to a large influx of additional supplies following the arrival of Qatar's LNG supplies.
"We have confirmed efforts to find new demands such as automobiles, aircraft and railway vehicles to reduce excessive sales dependence on LNG cold reserving material for ships," the company said, adding, "Tangible results on new growth engines have begun to emerge, including the recent signing of cooperation and supply contracts with non- shipbuilder companies such as Hyundai Motor, Dawonsys and Hanwha Aerospace."
Reporter An Hoe Hyun ahh@infostock.co.kr