November 22, 2024

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[THE INVESTOR] Korea Zinc has beat the fourth-quarter market expectations but this is not the time to purchase its stocks, said Korea Investment and Securities on Feb. 8, maintaining a “neutral” rating.

Its earnings target was based on an exceedingly low price and the volume estimate was conservative. Investors should confirm whether the variables including smelting commission, premium and volume, are likely to improve, said analyst Choi Mun-seon. 

Shinhan Financial Investment maintained a 590,000 won (US$515.15) target price but downgraded its recommendation to a “neutral” from a “buy,” saying that its operating profit this year will shrink following the decline in sales of its main products zinc and silver.

The zinc sales will fall 6.9 percent on-year to 600,000 tons as it is becoming hard to deliver zinc ore, forecast analyst Park Gwang-rae. 

The fact that the company is reducing output due to the difficulties itself shows that Korea Zinc’s leverage has weakened before the zinc smelting commission negotiations, added the analyst. 

By Hwang You-mee (glamazon@heraldcorp.com)