[Click eStock] "JNTC, Performance Growth Expected to Continue Through Second Half... Target Price Up"

Target Price Revised Upward from 23,000 Won to 25,000 Won

NH Investment & Securities on the 14th raised the target price for JNTC from 23,000 KRW to 25,000 KRW, expecting the earnings growth trend to continue through the second half of the year. The investment rating was maintained at 'Buy.'

Lee Gyu-ha, a researcher at NH Investment & Securities, explained, "We raised the earnings forecast and target price considering the recovery in profit margins driven by the expansion of Huawei smartphone shipments and yield improvements. Although there are recent concerns about additional US sanctions on Huawei, we maintain a 'Buy' rating due to strong domestic smartphone demand and the medium- to long-term growth potential of glass substrates."

JNTC recorded consolidated sales of 127.1 billion KRW and operating profit of 31.8 billion KRW in the first quarter of this year. Operating profit surged 1,325.7% compared to the same period last year. The earnings growth trend is expected to continue through the second half. The researcher said, "The first quarter operating profit exceeded estimates, mainly due to increased shipments to Chinese clients and improved cover glass yield. From the second quarter onward, the sharp earnings growth will continue, supported by expanded client volumes."

Not only did smartphone shipments increase, but the yield of 3D cover glass also improved, significantly enhancing margins in the first quarter. The researcher explained, "This trend is likely to continue through the second half, so we expect this year's operating profit forecast to be raised by 3.2% to 113 billion KRW, which represents a 295.9% increase compared to the same period last year."

The stock price is still considered attractive. The researcher said, "Considering the medium- to long-term growth potential of Huawei shipment expansion and new businesses such as glass substrates, the current stock price, with a price-to-earnings ratio (PER) of 11.3 based on the 2024 expected earnings per share (EPS), remains an attractive level."