[Click eStock] "BH, Expected to Achieve Record High Performance This Year Despite Concerns Over Weak IT Demand"

[Asia Economy Reporter Kwon Jae-hee] Yuanta Securities maintained a 'Buy' rating and a target price of 38,000 KRW for BH on the 26th.

In the third quarter of this year, BH achieved sales of 473.2 billion KRW and an operating profit of 59 billion KRW. This represents a 42% and 35% increase respectively compared to the same period last year, surpassing consensus estimates by 5% and 2%, marking strong performance.

The main reasons for the strong results include ▲ growth in related sales due to increased volume of display flexible printed circuit boards (FPCB) for North American clients ▲ continued favorable exchange rate effects ▲ and the seasonal effect of the third quarter, resulting in a 13% profitability.

BH is expected to continue its strong performance into the fourth quarter. Sales are projected at 475.6 billion KRW and operating profit at 50.4 billion KRW, representing increases of 18% and 16% year-on-year respectively. This is due to an upward revision of sales forecasts compared to previous estimates, including a 16% increase in display FPCB sales to North American clients. Additionally, the favorable exchange rate environment is expected to persist into the fourth quarter.

Accordingly, consolidated sales for next year are expected to reach 1.9329 trillion KRW, with operating profit estimated at 187.5 billion KRW.

Researcher Lee Su-rim of Yuanta Securities analyzed, "Although concerns about weak IT front-end demand have continued, leading to a stock price correction, BH is expected to achieve its highest-ever performance this year based on its solid position within client companies despite uncertainties in front-end set demand." He added, "It is also noteworthy that BH's position within client companies is continuously strengthening as competitors recently faced yield issues."