[Click eStock] "MCNEX to Expand Automotive Electronics Business This Year"

Daishin Securities Report

[Asia Economy Reporter Gong Byung-sun] Daishin Securities on the 22nd raised the target price for MCNEX from 48,000 KRW to 65,000 KRW, expecting an increase in sales of automotive electronic components this year and a positive spillover effect from the rise in Samsung Electronics' smartphone sales. The investment opinion was maintained as 'Buy.'

Sales of automotive electronic components, such as camera modules for vehicles, are expected to increase. As global automobile sales, including Hyundai and Kia, rise and the proportion of electric vehicles expands, demand for electronic components centered on camera modules is expected to grow. Kang-ho Park, an analyst at Daishin Securities, evaluated, "MCNEX is the company with the highest sales of mobile phone electronic components among domestic mid-sized companies, while actively reducing the proportion of mobile phone components and diversifying its portfolio, which is positive."

This year, MCNEX is also expected to benefit from the ongoing U.S. sanctions against China's Huawei in the global smartphone market. Analyst Park said, "When the U.S. pressures China's Huawei, it positively affects the increase in Samsung Electronics smartphone sales," adding, "MCNEX, which holds a high market share in mid-sized camera modules, is expected to see improved profitability."

Additionally, Samsung Electronics is expected to increase smartphone sales this year by expanding sales of budget models, accelerating the transition to 5G, and upgrading the specifications of the Galaxy A series. The plan focuses on increasing sales of budget models such as the Galaxy A series compared to premium smartphones like the Galaxy S, Galaxy Note, and foldable phones. Accordingly, MCNEX's overall operating profit is also expected to increase.

Analyst Park emphasized, "MCNEX's operating profit this year is estimated to be 80.1 billion KRW, a 35% increase compared to the same period last year," and added, "Overall external growth is expected."