[Click eStock] "Intops, Expecting Record High Performance Next Year Since Establishment... Target Price Up"

[Asia Economy Reporter Song Hwajeong] Shinhan Financial Investment forecasted on the 7th that Intops will record its highest performance since its establishment next year and raised the target stock price from 30,000 KRW to 37,500 KRW. The investment opinion was maintained as 'Buy.'

It is expected that the performance rebound trend will continue in the fourth quarter of this year. Shinhan Financial Investment estimated Intops' operating profit in the fourth quarter to be 25.7 billion KRW, down 18% compared to the same period last year. Researcher Park Hyungwoo explained, "The rebound trend continues following the third quarter," adding, "Although the spread of COVID-19 in Vietnam is steep, Intops' mobile factory is located in the relatively favorable northern region, and production disruption risks have been mitigated by diversifying production bases through domestic and Chinese factories." The home appliance sector is expected to turn profitable in the fourth quarter due to a rebound in operating rates, and the diagnostic kit manufacturing business is also expected to see a rebound in shipment volume.

Next year, the highest performance since the company's founding is anticipated. Shinhan Financial Investment projected Intops' sales next year to increase by 19% year-on-year to 1.3 trillion KRW, and operating profit to rise by 35% to 126.7 billion KRW. Researcher Park said, "Major clients are preparing to increase smartphone production, and in the past, even a 10% increase in front-end smartphone production volume led to a boom in the parts supply chain," adding, "Next year's production increase by clients will significantly exceed 10%." He further added, "Intops survived the restructuring of the case industry and will be the main beneficiary."

The growth of the diagnostic kit business is also expected to contribute to the record performance. Due to the completion of clients' inventory adjustments and expansion of delivery regions, sales growth and profitability improvement are expected to be positive. The home appliance case sector is expanding facilities to increase shipment volume in 2022 despite the spread of COVID-19. Monthly sales growth of over 30% is anticipated. Due to business diversification effects, the net profit margin (controlling shareholders) is rising sharply. The net profit margin is expected to increase from 3.9% in 2019 to 5.2% last year and about 7% this year.

Researcher Park said, "We have entered the smartphone production increase cycle, and the bottom of the major business front has been confirmed," adding, "With accelerated business diversification, Intops is evolving from a smartphone parts company into a comprehensive electronic product manufacturer capable of producing home appliance and automotive parts as well as electronic manufacturing services (EMS)."