[Featured Stock] Mobase Electronics, Beneficiary of Overlooked Hyundai-Kia Auto Parts... Expected to Achieve Quarterly Record Performance

[Asia Economy Reporter Hyungsoo Park] The stock price of Mobease Electronics, a manufacturer of automotive electronic components, is showing strong performance. As the automotive electronic components business grows and the company expands its business area to the electric vehicle sector, securities firms' analysis that profits will surge appears to have influenced the stock price.

At 9:38 AM on the 3rd, Mobease Electronics was trading at 2,960 KRW, up 15.4% from the previous day.

IBK Investment & Securities analyzed that Mobease Electronics' sales have been increasing since the second half of last year due to the recovery in sales of Hyundai Motor and Kia Motors.

Minhee Lee, a researcher at IBK Investment & Securities, explained, "Hyundai Motor and Kia Motors have set their global sales targets for this year at 4.16 million units and 2.92 million units, respectively," adding, "Considering the economic recovery and new car launch cycles, Mobease Electronics' operating environment this year is expected to be favorable."

Mobease Electronics supplies smart key systems, car lock sets, steering wheels, and dashboard surrounding control button devices to Hyundai Motor and Kia Motors. The company holds a market share of 40-80% for each product within its client companies. Based on cumulative sales as of the third quarter of last year, the sales composition is HMI (47.5%), electronic control systems/sensors (26.4%), security systems (16.4%), and die-casting and others (9.7%).

The researcher analyzed, "Among the business divisions, the most profitable is the electronic control systems/sensors sector," and added, "Recently, the expansion of vehicles equipped with wireless chargers and the rapid sales growth of handwriting recognition devices for Genesis vehicles have been notable."

He also added, "In the case of handwriting recognition devices, they were installed in the Genesis G80 and GV80 last year," and "This year, they are expected to be expanded to the GV70."

He emphasized, "The handwriting recognition device set is priced more than 10 times higher than other existing automotive electronic components," and "the operating profit margin is also estimated to be in double digits, which is expected to greatly contribute to profitability improvement."

The researcher stated, "The new secondary battery BMS business is expected to generate full-scale sales starting this year," and "Last year, the company secured BMS orders worth 31 billion KRW from Samsung SDI and SK Innovation."

He explained, "At the end of last year, a contract was signed with the U.S. electric vehicle manufacturer CANOO for electric vehicle-related parts worth 27 billion KRW," and "We expect profitability improvement due to increased automobile demand and high value-added products."

The researcher added, "It is estimated that in the fourth quarter of last year, sales reached 245 billion KRW and operating profit was 8.8 billion KRW," and "This is believed to be the highest quarterly performance."

Furthermore, "This year, driven by sales growth of high value-added products such as wireless chargers and handwriting recognition devices, as well as improved performance of overseas subsidiaries, consolidated sales are expected to reach 836.2 billion KRW and operating profit 25.7 billion KRW," estimating an increase of 6.7% and 150%, respectively, compared to last year. He added, "Mobease Electronics is an overlooked automotive electronic components stock."