[Asia Economy Reporter Hyungsoo Park] Sekonix is showing strong performance. Securities firms' analysis that the company has entered a long-term growth trajectory by expanding its business areas into smartphones, automobiles, and home appliances based on its optical technology appears to have influenced the stock price.
As of 9:14 AM on the 23rd, Sekonix is trading at 8,490 KRW, up 10.84% from the previous trading day.
Kim Unho, a researcher at IBK Investment & Securities, explained, "Sekonix has expanded its business areas not only to camera modules but also to lamps," adding, "it is securing a stable growth foundation through product mix improvement, customer expansion, and new products."
He continued, "We expect steady performance improvement through augmented reality (AR), virtual reality (VR), various automotive lenses, and autonomous driving-related products," and added, "The mobile camera portion accounts for only the 30% range, and sales of automotive-related parts are expected to approach 70% next year."
Sekonix's automotive parts mainly consist of camera modules and lamps. The camera modules are expanding from rear cameras to SVM (Surround View Module), Driver Status Warning system (DSW), and Lane Recognition system (MFC).
Researcher Kim analyzed, "Due to recent vendor changes, the market share within Hyundai Mobis for DSW has risen to the 60% range," and noted, "It is understood that a stable relationship is being continuously maintained."
He emphasized, "Initially, the business was lens-centered, so modules could not be supplied for models developed in advance," but added, "Modules are now being supplied for newly developed high-end vehicles."
He explained, "Although it is still an expectation, mandatory installation of DSW may be legislated in overseas markets," and "there is also anticipation for a significant increase in sales."
Additionally, development is underway with new overseas electric vehicle companies, and the main customers are companies adopting NVIDIA's autonomous driving method," he introduced.
Researcher Kim said, "For the first time since 2016, operating profit is expected to reach the 16 billion KRW level," and "With stable performance improvement, operating profit is expected to exceed 20 billion KRW next year."
Sekonix is estimated to achieve sales of 424.3 billion KRW and operating profit of 16.6 billion KRW this year. Sales are expected to increase by 11.3% compared to last year, and operating profit is expected to turn positive. Researcher Kim explained, "Due to concerns following the recent trading suspension and relisting, the current stock price is undervalued relative to performance," and "The target stock price is set at 14,000 KRW."
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