[THE INVESTOR] Nexen Tire will grow next year, said SK Securities on Dec. 7 maintaining a “buy” recommendation but lowered its target price to 12,500 won (US$11.18) from 15,000 won.
Its revenue in 2019 will increase 7.5 percent from this year to 2.13 trillion won and operating profit by 5 percent to 181.6 billion won. In the fourth quarter, its operating profit will come in at 42.7 billion won as price rise manages to offset commodities price rise to an extent, said analyst Kwon Sun-woo.
Its Czech plant will begin operations from the first quarter next year and although it will need time to stabilize, it won’t take long. It will reach a break-even point in the fourth quarter in 2019. Depreciation costs will undermine its profitability, but decline in commodities price will cushion the effect, said the analyst.
By Hwang You-mee (firstname.lastname@example.org)