[Click eStock] "Amotech, 3Q Operating Profit Expected to Turn Positive... MLCC Sales Begin in Earnest"

[Asia Economy Reporter Lee Jung-yoon] IBK Investment & Securities maintained a buy rating and a target price of 35,000 KRW for Amotech on the 1st, expecting the company to return to operating profit from the third quarter of this year, with increased and full-scale sales in the automotive parts segment and the multilayer ceramic capacitor (MLCC) segment.

Amotech's sales for the third quarter of this year are expected to reach 61.7 billion KRW, a 24.1% increase compared to the previous quarter. Sales in the automotive parts segment are projected to steadily increase. Additionally, MLCC sales are expected to become full-scale from the third quarter, exceeding 7 billion KRW. Sales from key clients in domestic telecommunications equipment, North American electric vehicles, and Chinese electric vehicles are expected to ramp up significantly.

Furthermore, operating profit in the third quarter is anticipated to turn positive. However, despite the full-scale MLCC sales, it is judged that high profitability is not expected immediately. Nevertheless, this quarter is understood to be the first to break away from the previous structure where costs were incurred without sales.

Amotech's major customers in the MLCC segment are expected to include domestic telecommunications equipment companies, Chinese electric vehicle companies, North American electric vehicle companies, and Chinese telecommunications equipment companies. It is also expected that European telecommunications equipment companies will be secured as customers in the future. Annual sales are projected to exceed 20 billion KRW. As sales become full-scale, profitability is also expected to improve rapidly. Kim Un-ho, a researcher at IBK Investment & Securities, explained, "Although progress is slower than expected, sales are expected to nearly double annually starting from 2023," adding, "This year, domestic telecommunications equipment and North American electric vehicles are expected to be the main drivers of sales, and European telecommunications equipment companies will also be secured as customers, along with domestic automotive parts companies."