April 26, 2024

• 

[THE INVESTOR] Hankook Tire has missed second-quarter market expectations, said Daishin Securities on Aug. 9, lowering the target price to 77,000 won (US$67.87) from 80,000 won while maintaining a “buy” recommendation.

Its operating profit fell 34 percent to 204 billion won and although margins will rise from the third quarter following the rise in prices and decline of commodity price, it will be burdened by the fixed cost from the factory in Tennessee that began operations in early July, said analyst Jeon Jae-cheon. 

SK Securities was more optimistic, maintaining a “buy” recommendation and raising the target price to 80,000 won from 73,000 won.

Its second-quarter earnings were dented by unfavorable exchange rate and slowdown in China, but sales has been picking up since June and combined with the lowered raw material prices, will push profits back up, said analyst Kwon Sun-woo.

The full-scale operations of its Tennessee factory will dispel concerns over decline in demand from major regions in the second quarter, said the analyst, adding that the price rise will push up its valuation.

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