[Click eStock] "MCNEX, Camera Module Market Recovery Expected Next Year"

Expansion of Automotive Camera Module Market Beyond Mobile Phones
Daishin Securities "Maintains MCNEX Target Price at 63,000 Won"

[Asia Economy Reporter Gong Byung-sun] MCNEX is expected to grow next year along with the recovery of the domestic camera module market. Furthermore, securities firms predict that MCNEX will achieve differentiated growth among domestic camera module companies through increased sales in the automotive sector and entry into new markets.

According to Daishin Securities on the 23rd, MCNEX's sales next year are estimated to increase by 25.6% compared to this year, reaching 1.2 trillion KRW, and operating profit is expected to rise by 129% during the same period to 66.2 billion KRW. This would be the best performance since 2019.

The domestic camera module market is expected to recover next year, driving growth. An increase in the average supply price of camera modules for Samsung Electronics and an expansion in the market share of OIS (Optical Image Stabilization) are anticipated. Samsung Electronics has decided to adopt OIS components in its entry-level Galaxy A series to increase its global smartphone market share next year.

Growth exceeding expectations is also a factor to look forward to. Samsung Electronics' smartphone sales next year are estimated at 290 million units, a 6% increase from this year, but considering Samsung's target of approximately 320 million to 340 million units, there is potential for additional growth. Samsung's focus on enhancing camera specifications, such as increasing camera pixel count and adopting OIS, is also a positive factor.

(Provided by Daishin Securities)

The camera module sector is expected to diversify in the long term, moving away from a focus on mobile phones to automotive and artificial intelligence (AI) applications. First, with the paradigm shift in automobiles, the expansion of automotive electronics and autonomous driving applications is rapidly growing the automotive camera module market.

Park Kang-ho, a researcher at Daishin Securities, said, “As there is a demand for camera modules equipped with solutions rather than single components, MCNEX's sales are higher compared to domestic competitors due to its cooperation with domestic automobile manufacturers,” and predicted, “MCNEX's automotive camera module sales, which were around 117.1 billion KRW in 2019, will increase to 197.7 billion KRW next year.”

Accordingly, Daishin Securities maintained its investment opinion of ‘Buy’ on MCNEX with a target price of 63,000 KRW. The closing price on the previous day was 47,900 KRW.