[Click eStock] "PIMS, Performance Normalization... Diversifying Sales Channels through Factory Expansion"

[Asia Economy Reporter Hyunseok Yoo] Shinhan Financial Investment analyzed on the 17th that PIMS will diversify its customer base with the normalization of performance and the expansion of new factories. The investment opinion 'Buy' and the target price of 35,000 KRW were maintained.

PIMS recorded consolidated sales of 17.6 billion KRW and operating profit of 2.8 billion KRW in the second quarter. Sales increased by 15.5% compared to the same period last year, but operating profit decreased by 25.9%. Seonghwan Hwang, a researcher at Shinhan Financial Investment, said, "Sales normalized from the second quarter as the operating rate of BOE, a major customer, recovered due to the increased adoption of OLED by Chinese smartphone companies," and added, "Operating profit margin was damaged compared to the previous year due to a significant increase in production personnel." He further stated, "It is expected to recover past profit margins with the stabilization of production at the new factory designed with an automated line in the first half of 2022."

He expected that the expansion of PIMS's new factory would diversify its customer base. He said, "From this month, the CAPA of the Chengdu factory in China will be added, and it will be fully operated in the fourth quarter starting with the approval of some smartphone models from major Chinese customers," and added, "The new factory in Namdong-gu, Incheon, which will be completed in the third quarter, is expected to operate normally as early as October."

He explained, "Preparation for the increasing demand will be completed in the fourth quarter, and as the OLED market expands rapidly, yield, unit price, and quality become key competitiveness for OLED panel manufacturers," and added, "F-Mask and S-Mask, which PIMS produces through its own development, are all products closely related to the production yield and deposition precision of panel manufacturers." He emphasized, "With the CAPA expansion making it easier to respond to the volume of large domestic customers, the sales structure centered on Chinese customers is expected to diversify rapidly until 2022."