April 19, 2024

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[THE INVESTOR] KCC’s earnings in the third quarter weakened from slow front industry and commodities price rise, said KB Investment and Securities on Nov. 20 lowering the target price to 370,000 won (US$328.01) from 440,000 won.

Its revenue fell 9.1 percent on-year to 931.3 billion won and operating profit by 27.6 percent to 76.9 billion won. Its main businesses, construction materials and paint, have been slow. Early Chuseok holiday and sluggish front industries including auto and shipbuilding weighed it down, while raw material price rise further brought down the bottom line significantly. Its acquisition of New York-based silicone supplier Momentive is wrapping up and considering the size of the deal, KCC’s financial burden will inevitably increase. However, there will be synergy effects, said analysts Chang Mun-jun and Cheong Dong-ik.

As Korean shipbuilders are winning more orders, KCC’s paint unit is likely to improve next year, they said maintaining a “buy” recommendation. 

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