[Click eStock] "Patron, The First Year of Earnings Recovery"

Hi Investment & Securities analyzed on the 27th that this year will be the first year of performance recovery for Patron. They maintained a 'Buy' investment rating and a target price of 10,500 KRW.

In the fourth quarter of last year, Patron recorded sales of 305.9 billion KRW and an operating profit of 4.5 billion KRW. Compared to the same period last year, sales increased by 11%, but operating profit decreased by 6.2%. Ko Eui-young, a researcher at Hi Investment & Securities, said, "The reason for the stronger-than-expected top-line growth was due to orders for flagship derivative models and mid-to-low-priced old models," adding, "Since the cameras for the old models had lower prices, profitability was understood to have fallen short of expectations." He also added, "It is estimated that the sluggish sales of relatively high-profit sensors also affected profitability."

Hi Investment & Securities expects Patron's sales and operating profit this year to reach 1.3 trillion KRW and 56.8 billion KRW, respectively, representing increases of 16% and 36% compared to the previous year. He stated, "This is based on a conservative assumption that the main customer's smartphone shipments will recover by only 2% compared to the previous year, but the top-line growth of optical mechatronics is expected to be remarkable," emphasizing, "Sales of mobile cameras are expected to increase due to orders for mid-to-low-priced new models, and automotive cameras are also expected to achieve top-line growth based on an order backlog exceeding 1 trillion KRW."

He added, "The sensor & package segment is expected to grow through mass production of touch sensors for IT products and SiP modules for wearables starting from the second quarter of this year," and forecasted, "The electronic communication business, mainly composed of finished products, is expected to open additional upside depending on whether outsourced production of electronic cigarettes expands overseas."