[Click eStock] "Haesung DS, Expecting Increased Sales in Automotive Electronics and Packaging in the Second Half"

DS Investment & Securities analyzed on the 21st that Haesung DS is expected to see an increase in packaging substrate sales due to the recovery of lead frames for automotive electronics in the second half of this year. The investment opinion 'Buy' and the target price of 67,000 KRW were maintained.

Researcher Lee Surim of DS Investment & Securities explained, "The first-quarter performance recorded an operating profit of 20.9 billion KRW, meeting consensus, driven by the recovery in sales of lead frames for automotive electronics and packaging substrates," adding, "Profitability also increased by 2.3 percentage points quarter-on-quarter due to the sales recovery of lead frames for automotive electronics, which are estimated to have a margin rate of around 20-25%."

DS Investment & Securities forecast that Haesung DS's sales and operating profit this year will increase by 2% each from the previous year to 685.5 billion KRW and 104.8 billion KRW, respectively. He said, "A clear performance recovery of lead frames for automotive electronics is expected from the third quarter," and "Sales growth of packaging substrates is also anticipated due to the full-scale transition to DDR5."

He emphasized, "Substantial performance growth is expected to become visible in 2025 when front-end IT demand and customers' capital expenditures (CapEx) recover, but gradual quarterly performance improvements can be expected starting from the second quarter of this year," adding, "The new expansion of the Changwon factory is scheduled to be completed in November this year, and when the new production capacity (CAPA) is fully operational in 2026, sales levels are expected to rise from 950 billion KRW to around 1 trillion KRW."