Shinhan Investment Corp. on Sunday raised its target price for Hyosung TNC from 600,000 won to 850,000 won, a 42% increase, citing expectations for improving industry conditions. It kept its “buy” rating.
Analyst Lee Jin-myeong said the higher target reflects an upward revision to 2026 earnings estimates, up 46%, as the upcycle gains momentum. He said the stock has surged 147% since the start of the year but remains undervalued compared with Huafon, the world’s No. 2 spandex maker.
Shinhan said the spandex market has entered a clear upswing. As of April, China’s spandex operating rate rose to 86% from 80% at the end of last year, while inventory days fell to 22 from 39. Prices climbed to 29,000 yuan per ton from 23,000 yuan, which Shinhan said confirms improving supply-demand conditions.
Hyosung TNC, the world’s top spandex producer, is expected to see the strongest profit leverage as conditions improve, supported by pricing power and cost competitiveness, Shinhan said. It estimated 2026 operating profit at 596.3 billion won, up 137% from a year earlier.
First-quarter results also beat market expectations. Operating profit came to 86.2 billion won, up 93% from the previous quarter and above the consensus estimate of 80.7 billion won. The spandex/PTMG segment posted 77.3 billion won in operating profit, up 60%, leading the gain. Sales volume rose 2% despite the Lunar New Year holiday, helped by steady demand and inventory building, while profitability improved as spandex prices rose more than raw material costs.
Shinhan said the improvement is likely to continue in the second quarter, forecasting operating profit of 138.7 billion won, up 61%, with room for another upside surprise. It cited entry into the peak season, expanding inventory demand and a widening increase in spandex prices.
* This article has been translated by AI.
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