[Click eStock] "Enox Advanced Materials, Industry Conditions and Margin Improvement... Record High Performance Even in Off-Season 2Q"

[Asia Economy Reporter Kwon Jae-hee] NH Investment & Securities maintained a 'Buy' rating on Inox Advanced Materials on the 20th, setting a target price of 78,000 KRW.

Inox Advanced Materials is expected to achieve positive results in the first half of this year due to favorable industry conditions and margin improvements. The increase in OLED panel shipments from display customers and the rise in market share are expected to lead to results exceeding market expectations in the second quarter as well. Considering that the second half is typically the peak season for IT demand, there is a high possibility of further performance expansion.

NH Investment & Securities forecasts that Inox Advanced Materials will record an operating profit of 64.2 billion KRW in the first half of this year, representing a 91.5% increase compared to the same period last year. The operating profit for the second quarter is also expected to exceed market consensus by approximately 30.3%, reaching 34 billion KRW.

The background of this strong performance includes better-than-expected shipments of large and small OLED display panels, which are major downstream industries, and the impact of new product launches such as foldable smartphones. Although there are concerns about recent raw material price increases, product sales are mainly settled in US dollars, while raw material purchases have a high proportion of the weak Japanese yen, leading to margin improvements. Margin improvements through restructuring of loss-making business units and production efficiency are also positive factors.

Lee Kyu-ha, a researcher at NH Investment & Securities, analyzed, "Due to favorable industry conditions and market share expansion, record-high results are expected even in the off-season first half. The second half is also expected to see increased sales from North American smartphone companies and increased OLED TV demand due to the World Cup, but the stock price is still considered undervalued."