[Click eStock] "Saekyung Hi-Tech, Continued Earnings Growth Expected... Target Price Up"

Target Price Raised from 9,000 Won to 11,000 Won

NH Investment & Securities on the 28th raised the target price for Sekyung Hi-Tech from 9,000 KRW to 11,000 KRW, forecasting a continued increase in earnings. The investment rating was maintained at 'Buy.'

Researcher Lee Kyu-ha of NH Investment & Securities explained, "The reason for the target price increase is due to the strong sales of customer smartphones, improved yield of Glasstic, and profit improvement from expanded line automation," adding, "Despite the recent stock price rise, the price-to-earnings ratio (PER) based on 2024 earnings per share remains around 7.5 times, indicating that undervaluation appeal still exists."

Sekyung Hi-Tech recorded solid earnings in the fourth quarter of last year. Lee analyzed, "Operating profit in Q4 increased by 588.2% year-on-year to 12.2 billion KRW, significantly exceeding our estimates," and added, "Despite a decrease in foldable smartphone shipments, strong sales of Glasstic cases contributed to the solid performance."

The upward trend in earnings is expected to continue for the time being. Lee forecasted, "In Q1, earnings growth will continue year-on-year, supported by expanded shipments of Glasstic cases for mid- to low-end smartphones," and noted, "In Q2, shipments of deco films and Glasstic cases to the Greater China region will expand, and in the second half, mass production of foldable smartphones is scheduled, so the upward earnings trend is expected to continue."

For domestic customers, not only flagship but also mid- to low-end smartphone sales are improving, and at the same time, the penetration rate and yield of Glasstic for mid- to low-end smartphones have greatly improved, significantly contributing to profit margin expansion. The foldable smartphones scheduled for new release in the second half are expected to switch to a roll-to-roll process in the front-end, which is anticipated to increase productivity and margins. Considering this, Lee said, "We have raised our operating profit forecast for this year by 6.8%," and added, "In 2025, there is also the possibility of additional material supply due to design changes in flagship smartphones and changes in display structure, so mid- to long-term growth potential will continue."