[Click eStock] "Amotech, MLCC Sales to Fully Launch in Second Half"... Target Price Up

[Asia Economy Reporter Lee Jung-yoon] IBK Investment & Securities maintained a buy rating on Amotech on the 26th, expecting the company to return to operating profit in the second half of this year, and raised the target price from 35,000 KRW to 40,000 KRW.

Kim Un-ho, a researcher at IBK Investment & Securities, explained, "It is difficult to expect performance improvement until the second quarter of this year," adding, "A decrease in domestic customer volume and a sluggish mobile components sector are anticipated, and the automotive electronics division is also unlikely to see rapid performance improvement due to semiconductor shortages."

He continued, "Through cost reduction, the operating loss is expected to decrease compared to the first quarter," and "It is expected that operating profit turnaround will be possible from the second half of the year." This is interpreted as the sales of the multilayer ceramic capacitor (MLCC) division, which had only incurred costs without sales, are expected to begin in earnest. MLCC sales for this year were projected at 23.5 billion KRW, with fourth-quarter performance expected to improve compared to the third quarter.

Amotech's sales are shifting from mobile-centered to automotive electronics. The automotive electronics ratio is expected to reach 46% this year. Researcher Kim said, "Although progress is slower than expected, the product lineup is steadily expanding," and "While there is currently significant performance volatility due to mobile fluctuations, it is expected to gradually transition to a phase of stable profit securing."

MLCC sales are also expected to nearly double annually starting from 2023. This year's sales are mainly driven by domestic telecommunications equipment and North American electric vehicles, and it is anticipated that European telecommunications equipment companies and domestic automotive electronics parts companies will also be secured as customers.