Attention to Stocks Related to the Launch of 'Galaxy S20·Z Flip'

Samsung Electronics' Galaxy Z Flip Unpacked event venue (Photo by Asia Economy DB)

[Asia Economy Reporter Kum Boryeong] With the release of Samsung Electronics' Galaxy S20 and Galaxy Z Flip, related stocks are also attracting attention.

Samsung Electronics unveiled 'Galaxy Unpacked 2020' on the 11th (local time) in San Francisco, USA. The Galaxy S20 series consists of three models: Galaxy S20 (6.2 inches), S20 Plus (6.7 inches), and S20 Ultra (6.9 inches), and the Galaxy Z Flip was released at a lower price compared to last year's Galaxy Fold.

Park Kang-ho, a researcher at Daishin Securities, said, "This year, the Galaxy S20 series is estimated to sell about 38 million units. It is expected to surpass the sales volume of the Galaxy S10 (36.98 million units in 2019). However, considering the delay in smartphone replacement cycles and intensified competition in the 5th generation (5G) mobile communication service phone market, there are limits to expecting significant sales and profit growth in Samsung Electronics' IM division." He added, "While the increase in Galaxy S20 series sales is important, Samsung Electronics seems to focus on proactive strategies and sales growth during the foldable phone blooming period, aiming to improve sales and profits through an increase in average selling price (ASP). Compared to the Galaxy S10 (2019), the Galaxy S20 series is expected to contribute to overall sales and profit improvement with ASP growth and premium foldable phone sales."

Not only Samsung Electronics but also related stocks are expected to benefit from the Galaxy S20 and Galaxy Z Flip. In the case of Duksan Neolux, it supplies red and green prime materials and hole transport layers (HTL) for the organic light-emitting diode (OLED) panels of the Galaxy S20. So Hyun-chul, a researcher at Shinhan Financial Investment, said, "This year, Duksan Neolux's operating profit is expected to grow 71% year-on-year to 30.5 billion KRW. Considering the increased demand for OLED panels for 5G smartphones in the US and China, the target stock price has been raised by 18.8% to 38,000 KRW." He added, "Although the stock price fell to 13,400 KRW last June due to Samsung Display's delay in QD OLED investment, it rebounded with Samsung's smartphone sales expansion. The Galaxy S20 series and the popularization of foldable smartphones are expected to lead to stock price rerating." Duksan Neolux's closing price on the 14th was 31,750 KRW.

In addition, related stocks responsible for CPI, cover lens protective films, and others are expected to benefit. NH Investment & Securities listed Kolon Industries and SK Innovation for CPI, UTI and Chemtronics for ultra-thin glass (UTG), and Sekyung Hi-Tech for cover lens protective films. They also named SKC Kolon PI and Inox Advanced Materials as beneficiaries for foldable process materials, and KH Vatec for hinges.