[Click eStock] "Jahwa Electronics, Expected Benefit from Folded Zoom Expansion"

Daishin Securities analyzed on the 23rd that Jahwa Electronics is expected to be a substantial beneficiary of the expansion of folded zoom technology. The investment opinion 'Buy' and the target price of 40,000 KRW were maintained.

Park Kang-ho, a researcher at Daishin Securities, said, "After Apple first applied folded zoom to the iPhone 15 Pro Max model in 2023, it is expected to expand to the Pro Max and Pro models of the iPhone 16 in 2024," adding, "The competitiveness of folded zoom lies in the actuator, OIS (Optical Image Stabilization), and Korean companies LG Innotek and Jahwa Electronics are responsible for supplying it."

He explained, "Jahwa Electronics' competitiveness is evaluated based on its technological edge and stable productivity in the ball-type (encoder) actuator field applied to folded zoom," and "Among global mobile phone component companies, Jahwa Electronics is the only one that has secured all customers including Apple, Samsung Electronics, and Chinese smartphone companies (Huawei, Xiaomi, Oppo, Vivo, etc.)."

He continued, "Despite low global smartphone growth in 2024, the application of high-magnification optical zoom within premium models is on the rise," emphasizing, "The number of models applying folded zoom cameras is increasing, and in the Chinese market, the supply of ball-type OIS is handled by Samsung Electro-Mechanics and Jahwa Electronics, while Samsung Electronics' Galaxy S24 Ultra model also receives OIS supply from Samsung Electro-Mechanics, Jahwa Electronics, and MCNEX."

Daishin Securities forecasted that Jahwa Electronics will record sales of 907.5 billion KRW and operating profit of 83.4 billion KRW this year. Sales are expected to increase by 80.3% year-on-year, with operating profit turning positive. He explained, "The competitiveness of having secured all global smartphone companies as customers is expected to be fully reflected in the 2024 performance," and added, "The recent stock price weakness is considered an opportunity to increase holdings."