[Click eStock] "Haesung DS, Operating Profit Up 20% This Year"…Target Price Up

[Asia Economy Reporter Ji Yeon-jin] Hana Financial Investment announced on the 7th that it has raised its operating profit forecast for Haesung DS this year by 20% compared to the previous estimate, maintaining a buy rating and increasing the target price from 68,000 KRW to 75,000 KRW.

Kim Rok-ho, a researcher at Hana Financial Investment, said, "Haesung DS is currently expanding its production of automotive lead frames and package substrates, and sales growth is expected to be noticeable from the second half of this year," adding, "Currently, only a slight expansion is underway due to partial resolution of bottlenecks, limiting significant quarterly sales increases, but from the second half onward, quarterly sales are expected to level up to over 190 billion KRW."

Haesung DS's sales in the fourth quarter of last year are expected to have increased by 53% year-on-year to 174.1 billion KRW. Operating profit is projected to jump 368% to 28.6 billion KRW, which aligns with market expectations. Strong demand for package substrates and better-than-usual lead frame performance drove these results, according to analysis. Researcher Kim stated, "Operating profit in 2021 increased by 95% compared to the previous year, likely reflecting year-end bonuses," emphasizing, "This confirms once again that Haesung DS's earnings fundamentals have improved."

This year, sales are forecasted at 726.6 billion KRW and operating profit at 126.7 billion KRW, representing increases of 13% and 49% respectively compared to the previous year. Researcher Kim said, "Demand for high value-added products is increasing in the upstream industries, and both package substrates and lead frames are in short supply, making it easier to expand high value-added products," adding, "Based on this, profitability is continuously improving through product mix enhancement."