NH Investment & Securities presented an investment opinion of 'buy' and a target price of 50,000 won for Poongsan.
The securities company explained that the target price of Poongsan corresponds to a PBR of 0.85x (ROE 14.8%) based on the 2021 earnings forecast.
Next, it announced that it raised its earnings per share (EPS) forecasts for 2021 and 2022 by 19.7% and 5.5%, respectively, to reflect strong copper prices and sound defense sales.
In addition, the annual sales volume of new copper is expected to increase to 192,000 tons, and defense sales are expected to increase slightly from the previous year to 735.4 billion won.
NH Investment & Securities said, "London Metal Exchange (LME) copper price recorded $11,300/ton on October 18th, surpassing the previous high of $10,449/ton on May 11th. We expect it to reach $13,000 per tonne.”
Meanwhile, NH Investment & Securities predicted that Poongsan's 3Q consolidated operating profit will exceed market expectations and 4Q earnings will rise to the level of 2Q.
Subsequently, copper prices recently rose to US$11,300/ton, raising expectations for profit growth.
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
