[Click eStock] "BH, Expected to Achieve Record High Operating Profit This Year"…Target Price Raised

[Asia Economy Reporter Lee Jung-yoon] Hana Securities maintained a buy rating on BH on the 26th, stating that the company is in a position to achieve a record high annual operating profit of 152.1 billion KRW this year, with potential momentum emerging. The target price was raised from 40,000 KRW to 41,000 KRW.

BH's sales in the second quarter of this year increased by 109% year-on-year to 339 billion KRW, and operating profit turned positive at 24.1 billion KRW. These results exceeded Hana Securities' estimates by 7% and 12%, respectively. Kim Rok-ho, a researcher at Hana Securities, explained, "Sales of the old model to North American clients remained solid amid favorable exchange rates, and market share expansion due to competitors withdrawing from the business was effective." He added, "While maintaining high utilization rates, the supply of parts for new models to North American clients is estimated to have further improved profitability." He also noted, "Sales to domestic clients showed better-than-expected performance due to preparations for foldable products launching in the second half."

Visibility for BH's second-half performance is high. Despite a potential decrease in new model sales compared to the previous year, the expanded market share from competitors' business withdrawal is expected to enable profit growth compared to the same period last year. Furthermore, despite the slowdown in smartphone demand, smartphones for North American clients are recording relatively strong sales based on consumers with higher disposable income. As a result, it is judged that relatively stable sales are likely to continue in the second half. Additionally, the start of reflecting performance from automotive wireless charging modules is expected to have a positive impact.

Researcher Kim stated, "The possibility of OLED adoption in tablets and laptops for North American clients is emerging, and related investments are likely to be decided within this year." He added, "Although the timing of reflecting these results is expected to be in 2024, which is somewhat distant, the emergence of new momentum with secured fundamentals is considered sufficient to drive stock price increases."