April 26, 2024

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[THE INVESTOR] Hyosung’s decision to spin off subsidiaries of the company will raise its corporate value, said Kiwoom Securities on Jan. 4, maintaining a “buy” recommendation and raising the target price to 210,000 won (US$196.92) from 200,000 won.

In addition to a holding company, it will have four new operating firms -- Hyosung T&C, Hyosung Heavy Industries, Hyosung Advanced Materials and Hyosung Chemical. As the newly established arms will be free of control from members of the owner family, the value of the company and shareholder value will be promoted, said analyst Lee Dong-wook.

Hyosung appears to be planning to launch a holding company through investment in cash after the spinoff. It is likely to sell off Hyosung Capital within two years of the transformation and improve its financial health, noted the analyst. 

The effects of last year’s expansion of the manufacturing capacities of its major products, including spandex, steel cords, and tire cords, will be fully reflected from this year, he added. 

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