[Click eStock] "Enox Advanced Materials, Performance Improvement Starts in Q1... Target Price Up"

Target Price Raised from 37,000 Won to 42,000 Won

NH Investment & Securities raised the target price for Inox Advanced Materials from KRW 37,000 to KRW 42,000 on the 6th, anticipating that the company's performance improvement will fully materialize starting from the first quarter of this year. The investment rating was maintained at 'Buy.'

Researcher Lee Gyu-ha of NH Investment & Securities explained, "Considering the strong sales of the client's flagship smartphones and the expansion of shipments of large OLED displays, we raised our earnings estimates and reflected this in the upward revision of the target price," adding, "We expect the performance improvement trend to continue, supported by the increase in the client's display shipment volume and market share, and thus maintain the Buy rating."

A surprise earnings report is expected in the first quarter. Lee said, "Inox Advanced Materials' operating profit for the first quarter is expected to reach KRW 14.8 billion, approximately 48% above the consensus (average securities firm forecast). The main reasons are the expansion of heat dissipation film volume driven by strong sales of the client's new flagship smartphones, and the increase in shipments and market share of OLED panels for TVs." NH Investment & Securities forecasted the company's operating profit for this year to be KRW 66.7 billion, a 16.5% increase from the previous estimate, representing a 58.1% rise compared to the previous year.

Considering the performance improvement and mid-to-long-term growth potential, the stock is viewed as excessively undervalued. Lee stated, "The current stock price is at a historical valuation low, with a price-to-earnings ratio (PER) of 12.1 times based on 2024 earnings per share (EPS). Given the expected increase in client shipment volumes and market share due to demand improvement, along with the expansion of mid-to-long-term growth prospects such as the lithium hydroxide processing business, this is an excessively undervalued zone."