Bloomberg News

OCI Falls to 16-Month Low on Concern Profit May Decline

September 28, 2011

(Updates with comment from analyst in fourth paragraph.)

Sept. 28 (Bloomberg) -- OCI Co., South Korea’s biggest polysilicon maker, fell to its lowest price in 16 months in Seoul trading after Shinhan Investment Corp. halved its share- price estimate on concern profit may decline.

The shares fell as much as 13.5 percent to 192,000 won, the lowest since May 26, 2010, and traded at 196,500 won as of 1:05 p.m. on the Korea Exchange. The stock is the worst performer today on the benchmark Kospi 200 index.

OCI will become “a fast mover” in responding to changes in global prices, shifting from its earlier position of being a passive follower, the Seoul-based company told analysts yesterday, according to its website.

As supplies exceed demand in the global market, waning prices of solar-cell products “are expected to sustain until the end of this year,” Lee Eungju, an analyst at Shinhan Investment, said in a Sept. 28 note to investors. The shift in OCI’s price policy is likely to affect the company’s profitability in the short term, he said.

While Lee maintained his “buy” recommendation on OCI stock, he lowered his 12-month target price to 320,000 won from 645,000 won.

--Editors: Indranil Ghosh, Ryan Woo

To contact the reporter on this story: Saeromi Shin in Seoul at sshin15@bloomberg.net Sangim Han in Seoul at sihan@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net


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