[Click eStock] "Interojo, Record-Breaking Performance but Stock Undervalued"

[Asia Economy Reporter Kwon Jaehee] Yuanta Securities on the 22nd issued a 'Buy' investment opinion and a target price of 34,850 KRW for Interojo.

Interojo, a contact lens manufacturing and sales company, has maintained steady performance growth centered on exports. Over the past five years (2016?2021), exports have grown at an average annual rate of 14.3%. The export ratio is expected to exceed 70% this year (73.7% cumulative as of Q3 2022), up from the low 50% range in 2016. Export growth is expected to continue through an increase in export countries, expansion of clients within export countries, market share growth, and product lineup expansion.

In the fourth quarter, the effect of the third factory is expected to be fully realized. The third factory was completed in 2021 and is currently expanding and establishing production lines this year. This is expected to bring economies of scale from increased production volume, expansion of product items and market share for overseas clients through customized lines, and profitability improvement through the introduction of a smart factory system. Stable yield rates have been secured at the third factory since the end of Q3 2022, and related effects are expected to be confirmed from Q4 onward.

This year's expected performance is sales of 133.8 billion KRW and operating profit of 33.4 billion KRW, representing growth of 14.5% and 18.4% respectively compared to the previous year. It is expected to set a record high performance again this year following last year.

Researcher Kwon Myungjun of Yuanta Securities analyzed, "This year will also record the highest-ever performance, and next year growth will continue due to the expansion of overseas sales countries and clients, and the full-scale operation of the third factory. On the other hand, the current stock price is attractive at a price-to-earnings ratio (PER) of 12.1 based on 2022 forecasts, which is the lowest level in the past five years."