[Asia Economy Reporter Park Jihwan] Korea Investment & Securities maintained a 'Buy' rating on PI Cheomdan Sosae on the 23rd, stating that sales and profits are expected to increase by 21% and 35% respectively compared to the previous year even without expanding the production line this year, and raised the target price by 13% to 61,000 KRW.
Kim Jeonghwan, a researcher at Korea Investment & Securities, projected record-high performance, saying, "First-quarter sales are expected to be 77.7 billion KRW, up 26% year-on-year, and operating profit is expected to increase by 37% to 20.2 billion KRW." The sales volume of PI film, used as a material for IT components, was better than expected, and the nominal operating rate exceeded 100% in the last quarter, which also lowered the product cost ratio.
He stated, "Despite the continued strong demand in the downstream industry, the production capacity increase in the PI film industry has not kept pace, resulting in a shortage situation," and added, "PI films are sold immediately after production, so inventory levels are being kept low." He also noted that product prices rose by about 5% for some products, and operating profit margin is expected to increase by 2 percentage points from the previous quarter to 26%.
Tight supply and demand for PI film is expected to continue throughout the year, and with high operating rates and stable profitability, sales and operating profit for this year are forecasted at 316.2 billion KRW and 81.6 billion KRW respectively. These figures represent increases of 21% and 36% compared to the previous year.
Researcher Kim evaluated, "Unless there is a significant drop in demand, the 100% operating rate system will be maintained throughout the year," and added, "The proportion of long-term supply contracts has also increased, securing productivity through product diversification."
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