[Click eStock] "SFA, Expecting Performance Improvement This Year"…Target Price Up

Shinhan Financial Investment

[Asia Economy Reporter Song Hwajeong] Shinhan Financial Investment on the 17th raised the target price for SFAC from the previous 51,000 KRW to 55,000 KRW, reflecting expectations for improved performance due to the momentum of OLED (organic light-emitting diode) investment resumption this year and an increase in new orders. The investment opinion was maintained as 'Buy.'

Researcher Soh Hyuncheol of Shinhan Financial Investment explained, "Considering the momentum of OLED investment resumption, increase in new orders, and diversification of the business portfolio including OLED, secondary batteries, semiconductors, and logistics equipment, we raised the target price by 7.8% compared to the previous level."

Momentum for OLED investment resumption is expected this year. Sales of the iPhone 12 have exceeded market expectations, and the shipment volume of OLED panels for iPhones this year is expected to increase by 60-80% from 100 million units last year to 160-180 million units. Samsung Display plans to produce large quantum dot (QD) OLED panels in the second half of the year, initially producing monitor QD OLED panels to secure early market share and stabilize yield, and plans to expand the production ratio of TV QD OLED panels in 2022. Researcher Soh forecasted, "Due to the increase in demand for small-to-medium and large OLED panels, new OLED panel investments are expected to resume in the second half of this year."

Shinhan Financial Investment projected that SFAC's total new orders will increase by 24.2% year-on-year to 1.13 trillion KRW this year, driven by a significant increase not only in OLED panel equipment but also in secondary batteries, semiconductors, and logistics equipment orders. Researcher Soh said, "Sales this year are expected to increase by 13.8% year-on-year to 1.77 trillion KRW, and operating profit is expected to rise by 36% to 227.6 billion KRW," adding, "Performance improvement is anticipated, breaking away from the sales stagnation of the past three years."

Researcher Soh added, "Due to sales stagnation and a decline in operating profit over the past three years, stock performance has not been good," and emphasized, "Now that expectations for OLED investment resumption are reviving, it is a time to pay attention to SFAC."