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| 효성첨단소재 탄소섬유 공장 전경. (사진=효성첨단소재) |
[Alpha Biz= Reporter Kim Sangjin] NH Investment & Securities has downgraded its target price for HS Hyosung Advanced Materials (298050) from 360,000 won to 330,000 won, reflecting the widening decline in carbon fiber prices and deteriorating profitability. Despite this adjustment, the investment rating remains "Buy." The stock closed at 266,000 won on the previous trading day.
NH Investment & Securities noted that the increased pressure on carbon fiber prices and profitability has led to a downward revision in operating profit forecasts. However, he highlighted the potential for profit improvement through capacity expansions outside of China by 2025, alongside a reduced valuation, which justifies maintaining the "Buy" rating.
NH Investment & Securities indicated that the influx of low-cost products from China is driving down carbon fiber prices, leading to a 6% cut in the 2025 operating profit forecast. The export price of carbon fiber fell from $20 per kg in Q2 to an average of $18 per kg in Q3, exacerbated by a combination of supply overcapacity and declining demand, which resulted in production issues at Chinese facilities during Q3. Consequently, the profitability of HS Hyosung transitioned into a deficit.
Despite these challenges, the planned capacity expansion outside China—from 16,500 tons in 2024 to 21,500 tons in 2025—is expected to positively impact profitability. Although the commissioning of new carbon fiber facilities was initially anticipated in Q4 of this year, it has been delayed to Q2 2025. Nonetheless, the analyst expects a turnaround in profitability by Q3 2025 as the benefits from product mix improvements begin to materialize.
For Q3, HS Hyosung reported an operating profit of 44.2 billion won, a 32.8% decline compared to the previous quarter, falling short of market expectations. The industrial materials division also saw a significant drop in operating profit, down 36.4% to 42.2 billion won, primarily due to price declines and reduced sales volumes impacted by the influx of low-cost Chinese products in both tire cords and carbon fibers.
The carbon fiber segment reported a shift into negative profitability, with estimated operating margins at -29%. However, the other segments contributed positively with an operating profit of 2 billion won, driven by improved market conditions for spandex products outside of China.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
