[Click eStock] Daejoo Electronic Materials, Earnings Improvement Expected... Target Price Raised to 120,000 Won

On the 14th, Kiwoom Securities raised the target price of Daejoo Electronic Materials to 120,000 KRW, citing upward revisions in earnings estimates. The investment rating was maintained as 'Buy.'

Junsoo Kwon, a researcher at Kiwoom Securities, explained, "This year, earnings from the silicon anode material and phosphor sectors are expected to increase significantly, and achieving double-digit operating profit margins is also anticipated due to product mix improvements. We adjusted the target price reflecting the upward revision of earnings estimates."

Daejoo Electronic Materials reported Q1 sales of 46.3 billion KRW and operating profit of 5 billion KRW, with operating profit exceeding market consensus. Although shipments of silicon anode materials and phosphors increased substantially, sales slightly declined compared to the previous quarter due to weak performance in solar cell materials caused by customer inventory adjustments. However, automotive materials, which grew significantly year-over-year, achieved economies of scale, and profitability improved greatly due to increased operating rates from the recovery of existing business units.

This year's earnings are expected to reach sales of 263.4 billion KRW and operating profit of 28.2 billion KRW. Researcher Junsoo Kwon stated, "Earnings from the silicon anode material and phosphor sectors are projected to increase significantly this year. In particular, shipments of silicon anode materials are expected to rise sharply in Q2 (with an estimated addition of 3 to 4 vehicle models supplied), and quarterly performance improvements are anticipated."