Hana Securities analyzed that the poor performance in the second quarter for LX International is due to temporary expenses and that a rebound is possible in the second half of the year. Although total performance this year may decrease slightly, the size of dividends is not expected to decrease significantly compared to the previous year. The target stock price remains at 40,000 won, and the investment opinion is maintained as 'buy.'
LX International recorded a revenue of 3.8 trillion won and an operating profit of 55 billion won in the second quarter. These figures represent a decrease of 6% and 57.6%, respectively, compared to the same period last year.
By institutional sector, it is estimated that the resources sector recorded a loss due to weak coal prices and the expense of waste rock disposal. Nickel revenue improved somewhat due to a premium arising from decreased supply of ore during the rainy season and increased demand from smelter inventories.
In the logistics sector, margins decreased due to weak freight rates, causing a slight decline in operating profit margins. However, it seems to have grown slightly due to an increase in external customer cargo volume.
However, total performance this year is expected to recover somewhat after hitting a low in the second quarter, indicating growth in the second half of the year. No expense for coal mine waste rock disposal is forecasted in the third quarter, and freight rates are also expected to rebound.
Yu Jae-seon, a researcher at Hana Securities, noted, 'The market situation in the third quarter is also not favorable,' but added, 'In terms of performance, this quarter is considered the bottom, and merely resolving temporary expenses could lead to an upward trend in profits in the second half of the year.'