[Click eStock] "BH, Strong Performance Driven by iPhone 13 Sales"…Target Price Upward Revised

[Asia Economy Reporter Ji Yeon-jin] Kiwoom Securities announced on the 19th that it maintains a buy investment opinion on BHE and raises the target stock price from 40,000 KRW to 43,000 KRW, expecting solid performance in the second quarter due to strong sales of the iPhone 13 series and proactive response to new products.

Oh Hyun-jin, a researcher at Kiwoom Securities, stated, "We believe that one of the factors causing the previous undervaluation of the stock price, the high volatility in first-half performance, will be resolved. With a favorable business environment continuing, including the launch of foldable phones by major domestic clients in the second half and the completion of the acquisition of the in-vehicle wireless charging business, the investment attractiveness is expected to increase."

The company is projected to achieve sales of 1.5437 trillion KRW this year, a 49% increase compared to the previous year, and operating profit of 160.1 billion KRW, a 125% surge.

Concerns about a decline in BHE’s performance due to reduced North American volume in the second quarter are not expected. Despite the overall slowdown in smartphone demand recently, demand for premium product lines remains robust, and although it is traditionally an off-season, North American clients are understood to have increased production plans for the higher-end lineup of the iPhone 13 in the second quarter.

The company mainly supplies liquid crystal polymer (LCP)-based flexible printed circuit board (RF-PCB) products, which have been applied since the iPhone 8 series and iPhone X, allowing for benefits such as improved profitability. Additionally, production for the next-generation iPhone scheduled for release in the second half is understood to have started in the second quarter.

Researcher Oh said, "We believe that proactive measures have been taken due to the resolution of supply chain uncertainties and expected volume expansion following competitors’ withdrawal," and forecasted, "The next-generation iPhone will continue to have high demand through improvements in camera performance and display design compared to existing models."