[Click eStock] "KH Vatec Secures Growth Engine with Titanium Case"

Shinhan Investment Corp. analyzed on the 19th that KH Vatec has secured new growth engines through metal cases and other products. The investment opinion 'Buy' and the target price of 21,000 KRW were maintained.

Shinhan Investment Corp. identified 'foldable' and 'metal cases' as growth factors for KH Vatec this year. Oh Kang-ho, a researcher at Shinhan Investment Corp., said, "First, the foldable market has established itself as a new growth engine for smartphone hardware," adding, "Assembly module sales in 2024 are expected to reach 296.7 billion KRW, a 20% increase compared to the previous year."

He also stated, "Titanium cases have also established themselves as a new growth engine," noting, "Other sales in the fourth quarter of last year reached 14.5 billion KRW, achieving a 74% growth compared to the same period last year."

He explained, "In addition to the foldable business area, the reflection of performance due to the full-scale supply of titanium cases is positive," and added, "This is a factor that can mitigate quarterly performance volatility caused by past foldable launches." He further added, "Gradual sales growth and profitability improvement are expected due to the metal case effect."

Shinhan Investment Corp. forecasted that KH Vatec's sales and operating profit this year will be 415.8 billion KRW and 42.6 billion KRW, respectively, representing increases of 14% and 27% compared to the previous year. He emphasized, "With the recent expansion of artificial intelligence (AI) functions leading to improved demand for IT devices, performance growth is expected to accelerate beyond previous estimates," and added, "There is also sufficient new growth potential such as the expansion of foldable product sales and changes in cases."