Shinhan Investment & Securities said on the 28th that Korea Zinc is expected to post strong results thanks to rising prices of key metals. It also noted that in the era of energy transition, the company should be reappraised as a growth stock rather than a simple defensive play.
At the same time, it maintained a "Buy" investment rating and raised its target price to 1.7 million won from 920,000 won. However, based on the previous transaction day, Korea Zinc's share price was 1,831,000 won, already above the target price.
Park Gwang-rae and Han Seung-hun, analysts at Shinhan Investment & Securities, said, "Korea Zinc's appeal as a core asset is standing out in an environment of rising uncertainty, based on the business stability of 103 consecutive profitable quarters," adding, "It needs to be redefined as a structural growth stock driven by the energy transition and expanding demand for critical minerals, rather than a simple defensive play."
Shinhan Investment & Securities projected Korea Zinc's fourth-quarter operating profit at 382.6 billion won, up 39.9% from the prior quarter. That tops the market consensus of 346.8 billion won. It said the sharp rise in prices of major metals during the quarter—silver (40.1%), gold (20.4%), copper (14.0%), and zinc (10.3%)—will drive the earnings improvement.
In particular, it said the earnings leverage from higher silver prices stands out. Park said, "Korea Zinc sells about 2,000 tons of silver annually, which accounts for about 5.7% of global supply," adding, "Silver is produced as a byproduct in the concentrate smelting process, but the segment's profitability will be well above the company average."
Park said, "Assuming a silver price of $90 per ounce in 2026, silver sales could rise to 7 trillion won, up 107.8% from the previous year," adding, "The share of silver sales will expand from 32.3% in 2025 to 47% in 2026."
Assuming a gold price of $4,890 per ounce, Park said, "In 2026, companywide revenue will reach 21.9 trillion won and operating profit will reach 1.5 trillion won, up 33.4% and 28.1%, respectively, enabling an earnings step-up."