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Profits and dividends to stay elevated

2023 review: Operating profit grows sharply

In 2023, LX Hausys saw a 635% YoY surge in operating profit, driven by: 1) cost structure/efficiency improvements in auto films; 2) lower raw material (e.g., PVC) prices and mix improvements in building materials; and 3) reduced logistics costs.

2024 outlook: Rise in building material exports and stronger B2C marketing initiatives

In 2024, we forecast operating profit to remain elevated at above W100bn. In terms of business strategy, we believe the company will focus on: 1) expanding exports of building materials (e.g., flooring materials); and 2) strengthening B2C marketing initiatives.

Maintain Buy and TP of W56,000

We expect profits and dividends to stay elevated in 2024. We maintain our Buy rating, as the stock looks undervalued. Clearer signs of a market recovery should emerge in 2H24 (interest rate cuts, positive apartment presales/transaction data, etc.).