[THE INVESTOR] Hankook Tire Worldwide’s recent stock price decline should be an opportunity for new investors, said Hana Financial Investment on May 17.
The value of its stake in Hankook Tire and Atlas BX, which respectively account for 83 percent and 11 percent of its corporate value, will rise in the latter half in tandem with their earnings improvement. Since its current stock price only reflects unfavorable factors, investors should take this opportunity to actively begin to purchase, said analyst Song Seon-jae.
The analyst estimated that Hankook Tire Worldwide’s corporate value is 2.3 trillion won, combining the 1.9 trillion won stake in subsidiaries and 400 billion won of royalty and net cash, saying that its current stock price is 35 percent discounted.
Hankook Tire’s first-quarter earnings missed market expectations but tire price rise from mid-2017 will be fully reflected this year and stable prices of main commodities will maintain a favorable spread, according to Song.
Its US factory, which has been weighing down its profit margin for the last couple of quarters, will cut losses by raising operation ratio, and will be able to reach break-even point in the third quarter, he added.
By Hwang You-mee (firstname.lastname@example.org)