[Click eStock] "Ysol, Performance Improvement Trend Gains Momentum"

On the 8th, KB Securities evaluated that a clear trend of performance improvement has been confirmed for YSOL. They maintained a 'Buy' investment rating and raised the target price from 10,000 KRW to 11,000 KRW.

Lee Chang-min, a researcher at KB Securities, explained, "We are revising upward the estimated average return on equity (ROE) over the next 10 years, reflecting improvements in cost structure through the decline in major material prices and internalization, as well as improved operating rates due to recovery in front-end demand."

YSOL's first-quarter performance this year is expected to record sales of 109.5 billion KRW and operating profit of 7.6 billion KRW. These figures represent increases of 14% and 104%, respectively, compared to the same period last year, exceeding market expectations. The researcher said, "Inventory adjustments by front-end customers have ended, and operating rates are rapidly improving," adding, "Wireless frequency (RF) filters are expected to show improved sales toward Samsung Electronics due to strong sales of the Galaxy S24." He also analyzed, "As the internalization ratio of integrated circuit (IC) components, a key material of RF modules, rises, and the price of IC components, which was a burden on performance in 2022, declines, a trend of profitability improvement is emerging."

Furthermore, the researcher forecasted that annual sales this year will increase by 11% from the previous year to 409.5 billion KRW, and operating profit will increase by 82% to 24.5 billion KRW. He added, "The number of models equipped with high value-added HS filters continues to expand, increasing the average selling price (ASP)," and "With the spread of artificial intelligence (AI) phones, the proportion of flagship smartphone sales is expected to rise, so benefits from improved sales of Samsung Electronics' flagship models are anticipated."