[Click eStock] "Deoksan Neolux. 2020 Sales Expected to Increase... Target Price Up 51%"

[Asia Economy Reporter Minji Lee] Hana Financial Investment maintained a buy rating on Duksan Neolux on the 20th, expecting an increase in demand for organic light-emitting diode (OLED) panels due to the launch of foldable smartphones, and set the target price at 47,000 KRW, up 51% from the previous target.

Duksan Neolux recorded sales of 27.7 billion KRW and operating profit of 9.2 billion KRW in the fourth quarter of last year, marking increases of 34% and 87%, respectively, compared to the same period last year.

Hyunsoo Kim, a researcher at Hana Financial Investment, said, “With the full-scale launch of 5th generation (5G) and foldable smartphones by Chinese set makers expected in 2020, Chinese panel makers such as BOE increased orders for OLED materials in preparation for the rise in OLED panel demand, which is the background for the performance improvement.”

In the first quarter of this year, Duksan Neolux is expected to post sales of 28.5 billion KRW and operating profit of 6.5 billion KRW, up 48% and 204%, respectively, compared to the same period last year. Despite it being an off-season without new Apple products, Samsung Display’s operating rate is expected to remain higher than anticipated due to the launch of Galaxy S20 and Z Flip. Sales of the new product ‘Green Prime’ are also expected to be reflected in earnest from the first quarter.

The company’s sales in 2020 are expected to increase by 26% to 123.8 billion KRW, and operating profit by 40% to 29.1 billion KRW. This is because Apple’s adoption rate of OLED is increasing, and the launch of foldable smartphones is scheduled. The significant increase in OLED panel shipments by Samsung Display due to the rise in OLED panel demand from Chinese set makers is also positive.

Researcher Kim said, “Considering that Chinese panel makers are still at low yield rates, Duksan Neolux’s sales will increase further,” adding, “Sales related to quantum dot organic light-emitting diode (QD-OLED) will also be reflected in earnest.”