[Click eStock] "Enox Advanced Materials, Bottomed Out and Entering Upward Cycle... Target Price Up"

Korea Investment & Securities announced on the 29th that it has raised the target price for InnoX Advanced Materials from 47,000 KRW to 54,000 KRW.

InnoX Advanced Materials, a component materials company specializing in electric and electronic sectors, is expected to record poor performance in the first quarter of this year due to a downturn in the market. Compared to the same period last year, sales are projected to decrease by 38% to 81.9 billion KRW, and operating profit is expected to plunge by 79% to 6.5 billion KRW. The sluggish demand for finished products has delayed the normalization of supply for organic light-emitting diode (OLED) TV panel materials, and sales of OLED panel materials for smartphones have also declined compared to the previous year.

However, from the second quarter, a clear recovery in material demand is anticipated. Estimated sales for the second quarter are 107.8 billion KRW, with operating profit at 14 billion KRW. In particular, OLED material sales are expected to reach 67.7 billion KRW, showing a 38% increase from the first quarter, indicating a recovery trend. Starting from the third quarter, the effects of the new Apple iPhone model, along with the recovery in demand for Chinese smartphones and home appliances, are expected to lead to a rebound compared to the same period last year. Annual operating profit is forecasted to bottom out at 74.3 billion KRW this year (-23% year-on-year) and rapidly improve to 102.3 billion KRW next year (+38%).

Jung-hwan Kim, a researcher at Korea Investment & Securities, stated, "The market has already passed the bottom and entered an upward cycle, and performance normalization will become more evident from the second half of this year." He added, "Although sales estimates for next year's new iPad OLED products have not yet been reflected, the increase in production volume of medium-to-large OLEDs, including those for the client's TV and monitor segments, will act as an upward factor for future earnings estimates."