Hana Securities said on the 7th that KCC is likely to benefit as the silicone market enters a full upcycle, extending a trend of rising selling prices. Reflecting gains in the value of KCC’s stake in Samsung C&T and the impact of treasury-share cancellations, the brokerage raised its target price to 730,000 won from 600,000 won and maintained its “buy” rating.
In a report, Hana Securities analyst Yoon Jae-seong said a price-to-book ratio target of 0.77 — a level seen at the 2021-22 peak — is “fully justifiable” given the upcycle in silicone, higher value of existing assets, and shareholder-friendly policies on treasury shares and dividends.
Yoon said the silicone market is expected to bottom in 2025 and move into an upcycle through 2027, citing limited capacity additions last year and this year, China’s push for restructuring, and the planned mid-2026 closure of Dow’s Barry, U.K., siloxane (DMC) plant.
He estimated KCC’s operating profit for the second quarter at 104.7 billion won, up from the previous quarter. Silicone earnings could improve quarter-on-quarter, he said, but building materials and paints are likely to see profit decline as higher costs are reflected.
Yoon forecast silicone operating profit of 23.0 billion won, saying selling-price increases of about 10% to 20% led by competitors such as Dow and Shin-Etsu are continuing and KCC could raise prices by a similar amount. He added that larger increases for higher-priced PA/FS product lines — including coatings, healthcare and electrical and electronic uses — would be a positive factor.
* This article has been translated by AI.
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