Shinyoung Securities said on the 17th that it will maintain its purchase of Kumho Petroleum as its share price return ratio (PER) for next year is undervalued at 4.4 times.
However, the target price has been lowered to 380,000 won as the net asset ratio (PBR) following the rate hike has been adjusted from 2.3 times to 2.1 times.
"Considering that the company suggested a separate standard dividend payout ratio of 20-25%, the year-end dividend is attractive, reaching KRW 12,000 on the basis of 20%. It will also continue its high profit level due to the downward stabilization of BD prices due to the expansion of NCC in Asia, the recovery of S BR/BR profitability due to a recovery in demand for tires and solid demand from NB Latex," said Shinyoung Securities.
Operating profit for the third quarter was 596 billion won, down 21% from the previous quarter, but is expected to record 179% higher performance compared to the previous year.
Due to its high performance in the second quarter, the third quarter will decrease compared to the previous quarter, but the synthetic rubber spread is expected to rise again due to the recent drop in raw material BD prices.
As demand for replacement tires is also recovering, SBR/BR profitability improvement, which has a high proportion of BD raw materials, is positive.
NB Latex's domestic exports fell about 20% on-month in July, which is believed to be a temporary impact from Southeast Asian lock-down. Exports are still expected to recover due to strong demand for medical gloves.
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
