[Asia Economy Reporter Ji Yeon-jin] Hana Securities announced on the 22nd that it maintains a buy rating and a target price of 43,000 KRW for Pungwon Precision, expecting significant growth as mass production of parts used in smartphones will begin in earnest from the end of this year.
Choi Jae-ho, a researcher at Hana Securities, stated, "Pungwon Precision is the only domestic company capable of mass-producing FMM ((Fine Metal Mask, a component used in displays to deposit organic light-emitting materials onto substrates)," adding, "FMM sales are expected to be reflected from next year, and through 8th generation FMM, the product lineup is expanding to include OLED panels used in IT devices."
Hana Securities expects Pungwon Precision's FMM sales to surge from 200 million KRW last year to 24.6 billion KRW this year, and 103.1 billion KRW next year.
Pungwon Precision's consolidated sales for the second quarter increased by 24.2% year-on-year to 13.5 billion KRW, and operating profit rose by 40.9% to 1.3 billion KRW. However, compared to the previous quarter, operating profit margin (OPM) fell from 11.5% in the first quarter to 9.9% in the second quarter due to rising raw material prices.
Pungwon Precision's consolidated sales for this year are projected to increase by 107.0% year-on-year to 86.3 billion KRW, and operating profit is expected to rise by 441.9% to 16.8 billion KRW. Researcher Choi explained, "Although the stagnation in the display industry’s growth is a significant risk factor, the reason for the high growth forecast for OLED is the restructuring of the large display market towards OLED," adding, "The premium OLED TV market share in Europe has already rapidly surpassed LCD, and plans for expanding large OLED panel production are under consideration, so OLED panel shipments are expected to continue high growth."
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