Mirae Asset Securities said on the 12th that OCI Holdings has a strong chance of recovering earnings in the fourth quarter of this year and next year. It raised its target price to 146,000 won from 131,000 won and maintained a buy rating. The previous trading day's closing price of OCI Holdings was 108,600 won.
In the third quarter of this year, OCI Holdings' operating profit came to 53.3 billion won, falling short of market expectations by 18.3 billion won. Lee Jin-ho, an analyst at Mirae Asset Securities, said, "The reason profitability fell far short of market expectations, rather than sales, was that fixed costs were heavy during the ramp-up after the temporary shutdown of the OCITS polysilicon plant."
On the third-quarter conference call, the company expected the plant to operate from August, but it actually began running in early September. As a result, electricity and labor costs were reflected in sales more than expected, and because costs were high, there were also some inventory impairment losses.
Mirae Asset Securities said expectations for OCI Holdings' earnings in the coming fourth quarter and next year are greater than concerns about the weak third quarter. The analyst noted, "The existing investment points—China's polysilicon restructuring and surging demand in the United States for non-China polysilicon and wafers—remain intact," adding, "On top of that, the pipeline of solar power and energy storage system (ESS) projects that have secured safe harbor has been joined by a data center infrastructure development business."
He added, "If visibility on future business performance is secured and we also account for the value of additional businesses to be reflected, there is still significant upside potential for the share price."