Kiwoom Securities announced on the 15th that Hyosung Advanced Materials is expected to rise further due to increased production capacity of super fibers (carbon fiber and aramid). It maintained its "buy" investment opinion and raised its target price to 950,000 won.
The production capacity of super fibers (carbon fiber and aramid) of Hyojeong Advanced Materials is expected to increase 93.5% from 5,350 tons earlier this year to 10,350 tons in the second half of next year.
"In the third quarter of this year, some improvement costs are expected to occur during the trial process of the expansion, but sales are expected to increase in earnest from the fourth quarter of this year," Kiwoom Securities said. "D bottle-necking of Hyosung Advanced Materials is expected to continue even after the expansion due to the expansion of the introduction rate of 5G optical cables and the growth of the electric vehicle market.".
"It is estimated that Dongsa's carbon fiber division cannot be sold due to lack of products," Kiwoom Securities said. "The selling prices of its flagship products (high-pressure containers and wires) are expected to improve at the time of completion of the increase.".
Kiwoom Securities said, "Despite the recent shortage of semiconductors for vehicles, Hyosung Advanced Materials' tire reinforcement performance is expected to maintain high profitability," adding, "This is because steel codes and nylon tire codes, which had low margins, have increased profitability recently due to cost improvement and price transfer.".
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