[Click eStock] "RFHIC, Recovery Begins from 2Q... Full-Scale Growth in the Second Half"

Verizon's Supply Expansion in the US Begins
Expectations Rise for Future Client Growth

[Asia Economy Reporter Minwoo Lee] RFHIC's sales are expected to grow significantly starting from the second half of this year. This is due to anticipated increases in sales related to the U.S. company Verizon, as well as expanding export performance to countries such as India, Canada, and Japan.

On the 14th, Shinhan Financial Investment forecasted that RFHIC will record sales of 30.6 billion KRW and an operating profit of 3.3 billion KRW in the second quarter of this year. Compared to the same period last year, sales are expected to increase by 108%, and operating losses are projected to turn into profits. As Samsung Electronics is the primary supplier to Verizon, meaningful order volumes have been confirmed since the first quarter. A full-scale recovery in performance is expected to appear from the second quarter onward.

In the second half of the year, sales growth is expected to accelerate, with annual sales reaching 130.3 billion KRW and operating profit at 13.4 billion KRW. This represents an 85% increase in sales compared to last year, with a possibility of turning profitable. Go Young-min, a researcher at Shinhan Financial Investment, explained, "According to the current supply plan, the volume supplied to Verizon will increase more steeply in the second half. Small quantities of 4G products are also being supplied to Japan (KDDI) and India (Jio), and there is a possibility of initial 5G product shipments starting in the second half."

Performance growth is expected to continue through next year. Future additional supply regions include domestic markets, Canada (Telus), and Japan (Docomo). Initial shipments are expected in the fourth quarter of this year, with a significant increase in volume anticipated from early next year. Researcher Go added, "The first product supply to Nokia is also being prepared with a target for the fourth quarter," and analyzed, "Diversification of customers beyond Samsung Electronics is expected."

Based on these factors, Shinhan Financial Investment maintained its investment opinion of "Buy" for RFHIC and set the target price at 55,000 KRW. The closing price on the previous trading day was 38,250 KRW.