[THE INVESTOR] Hankook Tire Worldwide will post solid earnings next year, said NH Investment and Securities on Dec. 28, maintaining a “buy” recommendation. Its fourth-quarter earnings, however, will be slightly slow, according to the securities firm, lowering the target price to 25,000 won (US$23.31) from 26,500 won.
Its revenue will rise 8.5 percent from this year to 904.3 billion won and operating profit by 21.4 percent to 277.2 billion won, estimated analyst Cho Su-hong.
Its major subsidiary Hankook Tire has bottomed out in the fourth quarter and will recover while another subsidiary Atlas BX is steadily growing, pointed out the analyst.
It will also acquire additional stake in Hankook Tire, which will lead to a decline in net cash reserves, but a steady cash inflow from dividends and royalties as well as the revenue from Atlas BX, he said.
Hurt by the delay in Hankook Tire’s US factory to stabilize and temporary suspension of the Korean factory, however, its fourth-quarter earnings will miss market consensus, with 214.5 billion won revenue and 61.4 billion won operating profit, said Cho.
By Hwang You-mee (firstname.lastname@example.org)