[Click e Stocks] "Interojo, Accelerating Earnings Growth Through Next Year"

[Asia Economy Reporter Song Hwajeong] Hana Financial Investment maintained its 'Buy' rating and target price of 41,200 KRW for Interojo on the 15th, forecasting an accelerated growth in performance until next year.

Interojo is the market leader in domestic contact lens manufacturing, sustaining solid growth through supplying OEM and ODM to global clients based on its own brand and diverse portfolio. Choi Jaeho, a researcher at Hana Financial Investment, stated, "As an export-driven company with exports accounting for about 70% of total sales, it benefits from the recently rising exchange rates. Expansion of supply to new global clients in Europe and Japan is expected, accelerating performance growth in the second half and next year." He added, "The current stock price is trading at a 2022 expected price-to-earnings ratio (PER) of 13 times, which is significantly undervalued compared to the historical PER band mid-cycle average of 21 times, making it attractive in terms of valuation."

Hana Financial Investment projected Interojo's Q3 consolidated earnings to show sales of 31 billion KRW, up 53.3% year-on-year, and operating profit of 7.7 billion KRW, up 113.9%. Researcher Choi explained, "The silicone-based color lenses launched last year and sales to Japan and Alcon are driving growth. Domestic sales are expected to increase by 78% year-on-year to 8.9 billion KRW, Japan sales by 53.6% to 9.1 billion KRW, and Alcon sales will reach 3.4 billion KRW in Q3 alone." He added, "Sales to Alcon are growing rapidly, accumulating to 5 billion KRW, and are expected to significantly exceed the initially forecasted annual 5 million USD this year."

The annual performance for this year is forecasted at sales of 120.2 billion KRW, up 36.3% year-on-year, and operating profit of 29.4 billion KRW, up 94.7%. Researcher Choi noted, "Various new product launches are continuing, and supply to new global clients in Japan and Europe is expanding. Along with profit leverage effects from scale expansion and favorable exchange rates, profitability is expected to continue improving."