Hansol Paper (213500.KS): Better-than-expected 1Q18 likely
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We believe Hansol Paper will report higher-than-expected earnings for 1Q18 as it managed to pass on higher raw material costs (e.g., pulp) onto paper ASP.
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- The company’s diversified product portfolio (printing paper 40% of sales, industrial paper 30%, and specialty paper 30%) is also a factor that contributes to earnings improvement. Industrial/specialty paper margins widened on the back of growing market shares.
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- We raise our target price to KRW26,000, in line with our upward earnings adjustment. Our new target price is based on 8.3x 2018F P/E.
Hansol Paper Co., Ltd. is a Korea-based company principally engaged in the manufacture and distribution of papers. The Company operates its business through three segments: printing paper segment which mainly manufactures white papers, art papers for printing and uncoated wood-frees; industrial paper segment which manufactures paperboards and food packaging papers; and special paper segment which manufactures thermal printing papers, carbonless duplicating papers, inkjet papers and label papers. The Company distributes its products within domestic market and to overseas markets.
Hyundai Motor Investment & Securities is the investment banking arm of the Hyundai Motor Group. The company offers stock brokerage and advisory services; derivative products brokerage and advisory services; wrap account portfolio management services; and VIP wealth management and tax planning, institutional equities, derivatives, and futures brokerage services, as well as sells investment and institutional products. It also provides equity offering, ABS, real estate PF and real estate PF securitization, offshore SOC, structured financing, asset securitization, real estate sales, IPO advisory, and private equity fund and fund management services; and CMA/RP portfolio management and fixed income based investments, as well as involved in the issuance, management, and brokerage of OTC derivatives. In addition, the company offers research services, including macro economic forecasts and stock market outlook, industry overviews and forecasts, fixed income strategies, corporate credit analysis, and valuation analysis. Further, it offers a range of retirement and pension services for individuals and corporate members; portfolios and asset allocation consulting and marketing services; proposing retirement pension plans; contract and payment management services; pension plan advisory and actuarial services; and system development and implementation services, as well as operates call centers for retirement pension services, etc.
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