ANALYST REPORT
Kumho Petrochemicals : Earnings at inflection point; initiate with Buy
■ Source of opoortunity
We initiate on Kumho Petrochemical with a Buy rating and a 12-month, SOTP-based target price of \250,000. which offers 18% upside potential.
■ Catalysts
Stronger earnings momentum in 4Q11, with margins recovering would drive growth. We expect synthetic Rubber
■ Valuation
Our 12-month P/B vs. ROE based target price is \250,000, implying 18% upside potential. We believe valuation remains compelling at P/B of 2.9X 2012 vs. ROE of 41% and 8.3X 2012E P/E
■ Key risks
Our key downside risks to our investment thesis and target price are weaker-than-expected global GDP trends, further tightening measures taken in China, and end tire demand weaknesses.
We initiate on Kumho Petrochemical with a Buy rating and a 12-month, SOTP-based target price of \250,000. which offers 18% upside potential.
■ Catalysts
Stronger earnings momentum in 4Q11, with margins recovering would drive growth. We expect synthetic Rubber
■ Valuation
Our 12-month P/B vs. ROE based target price is \250,000, implying 18% upside potential. We believe valuation remains compelling at P/B of 2.9X 2012 vs. ROE of 41% and 8.3X 2012E P/E
■ Key risks
Our key downside risks to our investment thesis and target price are weaker-than-expected global GDP trends, further tightening measures taken in China, and end tire demand weaknesses.
No. 1902011.10.18
Kumho Petrochemicals : Earnings at inflection point; initiate with Buy
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