[Click eStock] "Patron, Forecasted to Achieve Record High Performance Again This Year"

Record High Sales of 1.4 Trillion Won Expected This Year
Diversifying Revenue with Sensors and Wearable Devices...Reducing Dependence on Camera Modules

[Asia Economy Reporter Minwoo Lee] This year, Patron's sales are expected to surpass 1.4 trillion KRW, setting a record high. It is analyzed that stable growth can continue through business diversification such as increased supply related to foldable phones and expanded sales of wearable devices.

On the 25th, Daishin Securities maintained its 'Buy' rating on Patron with this background and raised the target price by 18.5% to 16,000 KRW. The closing price the previous day was 12,650 KRW.

First, the fourth-quarter results last year are forecasted at consolidated sales of 321.6 billion KRW and operating profit of 21.3 billion KRW. Compared to the same period last year, sales are expected to decrease by 3.5%, while operating profit is expected to increase by 122.6%. The operating profit level is about 15% higher than the market consensus of 18.5 billion KRW. Higher growth is expected compared to mid-sized camera module companies.

Considering Samsung Electronics' annual smartphone shipments last year reached 270 million units, an 8.2% increase from the previous year, the results are evaluated as exceeding expectations. Kangho Park, a researcher at Daishin Securities, explained, "As the supply form of camera modules to Samsung Electronics shifted from integrated to individual, Patron entered the premium segment with a dual approach, prioritizing supply of multiple models such as wide-angle and main cameras in the budget segment, thereby increasing its market share among Samsung Electronics suppliers."

Record-high sales are expected next year. Consolidated sales are projected at 1.452 trillion KRW and operating profit at 88 billion KRW, breaking the record since 1.25 trillion KRW in 2019. Samsung Electronics' smartphone shipments this year are estimated to increase by 13.3% from last year's forecast to 311 million units. Additionally, by supplying optical image stabilization (OIS) components to Galaxy A products, both the quantity and price of camera modules are expected to increase, leading to high growth. Supply of rear cameras for foldable phones is also increasing. With a diversified portfolio including sensors such as fingerprint recognition and heart rate sensors, routers, and wearable devices, performance is expected to trend upward.

Researcher Park stated, "Last year, a diversified sales structure was secured with sensors, routers, automotive cameras, and LEDs, reducing dependence on camera modules compared to before," and added, "We present Patron as the top preferred stock in the camera module sector among small and mid-cap stocks in the first half of this year."