[Click eStock] "Deoksan Neolux Exceeds Earnings Consensus... Promising Second Half"

Kiwoom Securities "Maintains Duksan Neolux Target Price at 56,000 Won"
Expected to Succeed in Diversifying Sales This Year

[Asia Economy Reporter Gong Byung-sun] Duksan Neolux's first-quarter earnings this year have exceeded market expectations (consensus). It is expected to achieve sales diversification starting this year. On the 11th, Kiwoom Securities maintained a target price of 56,000 KRW and a 'Buy' rating for Duksan Neolux.

Duksan Neolux's first-quarter sales this year were 42.7 billion KRW, up 34% compared to the same period last year, and operating profit was 11.6 billion KRW, an increase of 68%. The operating profit exceeded the consensus of 10.9 billion KRW. Kim Sowon, a researcher at Kiwoom Securities, explained, "Despite the off-season, it recorded the second-highest performance ever," adding, "Strong sales of major flagship models, demand from China, and diversification of applications such as organic light-emitting diode (OLED) laptops contributed to the results."

The second-quarter performance is also expected to meet the consensus. Kiwoom Securities forecasted Duksan Neolux's second-quarter sales at 38.3 billion KRW and operating profit at 11 billion KRW. Due to the seasonal off-season, demand for Apple's iPhone 12 series and Samsung's Galaxy S21 smartphones is expected to decrease, but shipments of OLED laptop panels to customers are expected to expand. Additionally, supply of materials for next-generation foldable smartphones and iPhones is also set to begin. In terms of profitability, the one-time cost issue reflected in the first quarter will disappear, and the operating profit margin is expected to improve by 2 percentage points from the previous quarter to 29%.

Sales diversification is also expected to be successful this year. Researcher Kim said, "We steadily expanded market share within customers through diversification of supply materials," and added, "Sales, which had been concentrated on smartphones, are expected to achieve diversification starting this year." In the second half of the year, based on increased market share within customers and diversification of applications to IT devices and quantum dot (QD)-OLED TVs, the company is also aiming for record-high performance.