[Click eStock] "BH, Expected to Achieve Record High Performance Next Year"

Hana Financial Investment Report

[Asia Economy Reporter Minji Lee] Hana Financial Investment maintained a buy rating on BH on the 3rd and raised the target price by 23% from the previous to 32,000 KRW. This is due to a significant upward revision of the operating profit estimates for this year and next year.

BH's sales in the fourth quarter of this year are expected to grow 57% year-on-year to 364.8 billion KRW, and operating profit is expected to increase by 1,697% to 44.8 billion KRW. These are strong results exceeding the current consensus by 18% and 28%, respectively.

Researcher Rokho Kim of Hana Financial Investment explained, "BH supplies parts for the Pro lineup, and among the iPhone 13 series, the response for the Pro and Pro Max models is favorable, so sales are expected to increase," adding, "Sales and operating profit are expected to increase compared to the previous quarter, indicating a turnaround in performance."

BH's sales in 2022 are projected to reach 1.2304 trillion KRW, and operating profit to 123.8 billion KRW, increasing 23% and 71% respectively from the previous year, setting a record high. Operating profit is expected to surpass the 91 billion KRW recorded in 2018, marking the highest level in four years. Growth in shipments of foldable smartphones to domestic clients, strong performance of the iPhone Pro lineup for North American clients, and market share expansion due to competitors exiting the business are anticipated to drive external growth.

Researcher Rokho Kim said, "Although there were concerns about a decline in iPhone demand, it is expected to be offset by market share expansion," adding, "Sales of 5G antennas and electric vehicle-related products will also contribute to growth due to increased demand in upstream industries and BH's expansion of production facilities." Above all, since losses were incurred in the first half of next year, the performance momentum for the first half of next year is estimated to be strong compared to the same period last year.

Researcher Rokho Kim added, "In an environment where uncertainties remain regarding the spread of Omicron and demand for the iPhone 13 series, the upward revision and visibility of short-term performance can be sufficiently differentiated points."