[Click eStock] "BH, Expected Record High Earnings... Growth Potential Remains Valid"

[Asia Economy Reporter Lee Jung-yoon] Hana Investment & Securities maintained a buy rating on BH on the 22nd, projecting record-breaking earnings for the first quarter of this year, and raised the target price from 32,000 KRW to 40,000 KRW.

BH's first-quarter sales this year are expected to reach 351.6 billion KRW, a 153% increase compared to the previous year, and operating profit is forecasted to turn positive at 21.8 billion KRW. These figures exceed consensus estimates by 11% and 12%, respectively. Kim Rok-ho, a researcher at Hana Financial Investment, explained, "The main reason for the sales exceeding estimates is revenue from North American clients," adding, "Although it has been 5 to 8 months since the launch of the iPhone 13, sales remain strong, and the positive impact from competitors withdrawing from the business was stronger than expected." He also noted, "Sales to domestic clients contributed to performance through the launch of flagship models and an increased proportion of ultra-high-spec models."

Furthermore, BH is expected to set a new record for the highest performance in the second quarter of this year. Sales are projected to increase by 68% year-on-year to 272.7 billion KRW, and operating profit is expected to turn positive at 14.5 billion KRW. Similar to the first quarter, a favorable business environment is anticipated to continue due to strong sales of the iPhone 13 and high-spec models. First-half sales this year are forecasted to rise 107% year-on-year to 624.3 billion KRW, driven by an upgrade in the detailed specifications of the iPhone 13 display, which increased unit prices, and the positive effects of competitors exiting the market. Considering the production capacity of suppliers, it is highly likely that the current market share will be maintained.

Researcher Kim stated, "The key point to watch going forward is whether growth can be secured in upstream industries beyond mobile displays," adding, "This year, the sales proportion related to 5G antenna cables and secondary batteries for mobile and electric vehicles is estimated at 4% and 7%, respectively, totaling 11%." He continued, "From the third quarter of this year, sales of vehicle wireless charging modules, which will be reflected in earnings, will account for 4%, expanding the total to 15%. In 2023, this sales proportion is expected to increase to 24%, and wireless charging modules are anticipated to guarantee visible external growth based on order backlogs."