Shinyoung Securities said shareholder-friendly policies are being confirmed on top of improvements in KCC's fundamentals and raised its target price to 640,000 won from 530,000 won. KCC's closing price in the previous trading day was 493,500 won.
On the 9th, KCC disclosed that it will split-retire about 13.2% (1,174,300 shares) out of its 17.2% (1,532,300 shares) treasury stock holdings by 2027, and use 4% (358,000 shares) for employee compensation within four years.
Park Sera, an analyst at Shinyoung Securities, said, "In September last year, KCC faced strong backlash and a public shareholder letter after saying it would use treasury shares to issue exchangeable bonds (EB) and make grants to the in-house employee welfare fund, and it then fully scrapped the plan," adding, "In this situation, the shift to canceling treasury shares is meaningful as a return to a shareholder-friendly stance on the treasury stock issue that the market and shareholders watched most closely."
The company's fundamentals were also assessed positively. Park said, "The spread is widening in the silicone division, which has the largest share of revenue, so we expect operating profit in the silicone division to improve in 2026." Based on 2025, KCC's revenue mix is silicone 47%, paint 29%, and building materials 15%.
The impact of energy price volatility from U.S.-Iran tensions is expected to be limited. Park said, "The share of the paint and building materials businesses, which are more correlated with oil prices than in the past, has decreased," adding, "Since oil price changes are reflected in costs with a time lag, the actual profit and loss impact will vary depending on whether selling prices can be passed through and on supply-demand conditions."