[Click eStock] "BH, High Growth Potential in Electric Vehicles and 5G New Businesses... Expecting Record Performance"

NH Investment & Securities Report

[Asia Economy Reporter Minji Lee] NH Investment & Securities maintained a buy rating and a target price of 30,000 KRW for BH on the 21st. This is based on the expectation that the company will achieve its best-ever performance this year through recovery in its core business and growth in new businesses.

BH is estimated to have recorded an operating profit of 23.4 billion KRW in the fourth quarter of last year, marking a 97% growth compared to the same period the previous year. However, due to the expansion of sales of North American smartphones with lower selling prices, it is expected to fall short of the market estimate of 36.4 billion KRW.

This year, operating profit is projected to reach 111 billion KRW, a 102% increase from last year, setting a record high. Improvements in demand, weakening competition intensity, and expansion of new business sales are anticipated.

Specifically, the company expects performance improvement driven by demand recovery from North American smartphone manufacturers and increased penetration of OLED displays. Sales to North American smartphone companies are expected to increase by 32.8% compared to last year due to increased smartphone shipments by clients, expanded OLED penetration, and weakened competition intensity. Client smartphone shipments are forecasted to rise by about 8% year-on-year.

New businesses such as flexible printed circuit boards (FPCB) for electric vehicle battery packages and 5G antenna cable FPCBs are also predicted to experience high growth. The sales proportion of these two products is expected to rapidly expand from 10.5% this year to 45.7% in 2024. Researcher Lee Gyuha explained, “It is very positive that new products are being adopted in high-growth industries such as electric vehicles and 5G smartphones.”

Researcher Lee Gyuha stated, “Considering the recovery of the core business and the mid- to long-term growth potential of new businesses such as FPCB for electric vehicle batteries and 5G smartphone antenna cables, a PER (price-to-earnings ratio) of 8 times based on this year’s earnings per share is excessively undervalued.”