[Click eStock] "EMTEK, Full-Scale Launch of Healthcare Business"... Target Price Up

[Asia Economy Reporter Lee Jung-yoon] Daishin Securities raised the target price for EMTEK from 55,000 KRW to 66,000 KRW on the 25th, maintaining a buy rating, citing expectations of high growth in earnings as the healthcare sector begins full-scale operations.

EMTEK's sales this year are expected to increase by 50% year-on-year to 599.9 billion KRW, with operating profit rising 87% to 69.5 billion KRW.

The healthcare division will start full-scale operations with the establishment of a production facility in Dongtan, Gyeonggi Province. Daishin Securities analyst Han Kyung-rae stated, "It is understood that medical devices have started business with major healthcare clients," adding, "Collaboration on multiple medical device items is underway, and expansion from OEM (Original Equipment Manufacturing) to ODM (Original Design Manufacturing) business is expected."

In the beauty device sector, EMTEK is conducting ODM business for APR Group's Mediheal Age-R device. Since Mediheal's sales exceeded 100 billion KRW last year and aim for more than 200 billion KRW this year, more than doubling, benefits are expected.

Furthermore, EMTEK's e-cigarette and component business is analyzed to perform well despite market concerns. The analyst explained, "The recent one-month stock price decline was due to concerns over the Russia-Ukraine war and sluggish sales caused by the Galaxy S22 GOS (Game Optimization Service) issue," adding, "Sales to Russia and Ukraine account for less than 5% of e-cigarette sales, and most deliveries were made by February this year, so the impact on earnings is limited."

He also added, "Contrary to concerns related to the Galaxy S22 GOS, stable supply continues, and EMTEK supplies as a main vendor to mid- to low-priced models, with a strong possibility of supplying modules for the next smart watch."