[Click eStock] "NCN, Autonomous Driving Semiconductor Low Price Buying Opportunity"

[Asia Economy Reporter Ji Yeon-jin] Yuanta Securities announced on the 29th that NCN is expected to see significant sales growth amid the expanding autonomous driving semiconductor industry.

Researcher Park Jin-hyung of Yuanta Securities stated, "NCN's stock price showed a temporary rise in January but then experienced a sluggish trend due to delays in consolidated profitability turnaround and weakened industry investment sentiment caused by the shortage of automotive semiconductors. Additionally, concerns about overhang surfaced ahead of the scheduled convertible bond conversion request at the end of July. However, considering the earnings and stock price upside, this conversion is judged to be an excellent opportunity to buy NCN shares at a low price."

NCN's sales in the second quarter of this year reached 26 billion KRW, a 44% increase compared to the previous year, while operating losses continued at 2.9 billion KRW. Despite a decrease in vehicle shipments, sales growth is estimated to have been driven by increased demand in the upstream industry, and it is analyzed that investment costs in subsidiaries continued.

This year's expected sales and operating profit are 130.4 billion KRW (a 48.5% increase year-on-year) and 300 million KRW, respectively, with a turnaround to profitability anticipated. The key factors going forward are the timing of the consolidated profitability turnaround, Nextchip's earnings growth, and the full-scale expansion of demand in the upstream industry.

Researcher Park said, "NCN supplies video security camera solutions based on video processing and transmission technology to the semiconductor and aftermarket sectors. As the market for black boxes grows and market share expands, stable earnings growth is expected to continue." He added, "Nextchip is expected to highlight its ISP (image processing), ADAS SoC (recognition), and AHD (transmission) products as the need for sensors (cameras, radar, LiDAR) responsible for environmental recognition in autonomous vehicles increases. Significant sales growth is anticipated in the second half of this year from domestic and global clients."