Hyundai Motor Securities on the 13th said Korea Zinc is expected to see earnings growth this year on continued rises in zinc and precious metal prices. It initiated coverage with a "buy (BUY)" rating and a target price of 2.01 million won. Korea Zinc closed the previous session at 1.674 million won.
Park Hyun-uk, an analyst at Hyundai Motor Securities, said, "Earnings are expected to increase significantly this year due to rising prices of zinc and precious metals," and noted, "Through expanding production of strategic minerals such as rare metals, we can also expect a long-term increase in corporate value."
It projected Korea Zinc's first-quarter revenue at 5.5919 trillion won and operating profit at 556.8 billion won. Operating profit would be up 105% from a year earlier. On an annual basis, it forecast revenue of 22.4475 trillion won and operating profit of 2.2013 trillion won.
It viewed higher precious metal prices as a driver of improved results. It projected zinc prices to rise 4% from the previous quarter and silver prices to climb 65%. Accordingly, it estimated the share of silver in standalone revenue would expand to 46% this year from 33% last year.
It also cited expanded production capacity as a positive factor. Park said, "Copper production capacity is scheduled to expand to 150,000 tons by 2028," and explained, "The number of rare metal products will also increase from the current 12 to 14 by 2028, including gallium and germanium."
Hyundai Motor Securities derived the target price by reflecting the share price premium seen during past zinc price upcycles in 2017, 2021 and 2025. During those periods, Korea Zinc's price-earnings ratio (PER) was about 26 times.