[Featured Stock] Newplex, the Most Undervalued Metaverse Stock... Facebook Unveils Next-Generation VR

[Asia Economy Reporter Hyungsoo Park] Newflex is showing strong performance. Rapid improvement in earnings and increased investment attractiveness, according to securities firm analysis, appear to have influenced the stock price.

As of 9:11 AM on the 15th, Newflex is trading at 3,940 KRW, up 14.2% from the previous day.

Oh Hyunjin, a researcher at Kiwoom Securities, identified Newflex as the most undervalued company related to the metaverse.

He explained, "Recently, Newflex newly entered the automotive FPCB market through the electric vehicle battery sector," adding, "There is growing expectation for earnings growth due to increased market share in the camera module sector, and the company is showing results in new businesses such as automotive and virtual reality (VR) device products."

He continued, "The camera module FPCB market is expected to see a significant increase in market share starting in the second half of the year," noting, "Major competitors are showing signs of withdrawing from the camera module FPCB market."

Furthermore, he emphasized, "The benefits from increased smartphone shipments in the second half due to new product launches by client companies will also be concentrated on Newflex," and "Operating profit is projected to reach 6.3 billion KRW in the second half of this year."

Researcher Oh analyzed, "With achievements in newly entered businesses as well, Newflex will drive mid- to long-term growth," adding, "It holds a dominant position in the FPCB market for Oculus, the leading VR device company, so benefits from device growth will be concentrated."

He explained, "VR devices are gaining attention as one of the technologies supporting the metaverse," and "Since its launch, Oculus Quest 2 has increased its market share to 75%, leading the market."

Newflex's sales to Oculus this year are expected to reach 26 billion KRW, a 75% increase compared to the previous year. Regarding another new business, automotive, Researcher Oh judged that with the start of battery module FPCB supply, Newflex will expand its client base and applicable models.

Researcher Oh estimated that Newflex will achieve sales of 173.6 billion KRW and operating profit of 2.8 billion KRW this year. Sales are expected to increase by 17% compared to last year, with operating profit turning positive. Next year, sales are expected to reach 199.3 billion KRW and operating profit 15.9 billion KRW, representing a 475% increase in operating profit. He emphasized, "Newflex's stock price had been sluggish due to two years of continued losses and poor earnings, but even with recent rises, it remains undervalued when reflecting the structural growth of existing and new businesses."

Lee Gyuha, a researcher at NH Investment & Securities, forecasted, "From October, new extended reality (XR) devices enabling next-generation metaverse beyond the existing 2D metaverse will be launched," adding, "Next year, global IT companies are expected to release related new products, benefiting related component companies."

He added, "On the 28th (local time), the world's largest metaverse event, Facebook Connect conference, will be held," emphasizing, "There is a possibility that Facebook will unveil the next-generation Oculus Quest VR device at the event." Facebook recently released teaser images of next-generation VR devices.