Hyundai Motor Securities lowers Korea Zinc's target stock price to 1.42 million won... Maintain ‘buy’ investment opinion

(Seoul = Yonhap News) Reporter Go Eun-ji = On the 1st, Hyundai Motor Securities lowered its target stock price for Korea Zinc [010130] from 1.5 million won to 1.42 million won, saying, "Operating profit is expected to decrease as gold and silver prices are weak and the won is strong."

However, we maintained a ‘buy’ investment opinion, considering strategic mineral production and overseas business to be positive for improving corporate value. The closing price the previous day was 1.07 million won.

Researcher Park Hyun-wook said in the report that day, "Korea Zinc's operating profit in the third quarter is expected to be KRW 424.6 billion, a 56% increase from the same period last year. This estimate is at the lower end of the consensus (market average forecast)."

He continued, “The zinc price, which is reflected in performance, rose 10% compared to the previous quarter, but the silver price weakened 19% and the gold price weakened 5%. The won also strengthened, so operating profit will decrease compared to the previous quarter.”

However, “the price of zinc continues to be around $4,000 per ton, up 15% compared to three months ago,” he said. “Over the past 30 years, it has only exceeded $5,000 per ton in 2006 and 2022, so the current price is at a historically high level.”

He said, “Considering that the price of zinc is one of the determining factors in Korea Zinc’s stock price, we believe that the stock price should also be high.”

In addition, “Korea Zinc is pursuing the construction of an integrated smelter in Tennessee, USA, with construction scheduled to begin in 2027 and completion and operation in 2029,” he said. “In the past, stock prices rose by reflecting this in advance when there was a large-scale facility expansion, and it is a positive point in the mid-term.”

It was explained that the target stock price was calculated by applying an appropriate price-to-earnings ratio (P/E) of 24 times to this year's expected earnings per share.