Shinhan Investment Corp. announced on the 10th that it maintains a target price of 360,000 KRW and a 'Buy' investment rating for Rino Industrial.
Researcher Oh Kang-ho of Shinhan Investment Corp. stated, "Despite recent stock price weakness, we maintain Rino Industrial as our top pick among IT component socket companies." He evaluated positively the expectations for earnings growth due to the recovery in IT device demand, the continued increase in P and Q driven by expanding demand for high value-added chips, and the securing of solid earnings strength through customer diversification.
After recording an operating profit of 23.3 billion KRW in the first quarter, the stock price has adjusted downward by 18%. This was judged to be due more to expectations of a performance surprise shown in the fourth quarter of last year rather than consensus underperformance. Despite increased earnings volatility, the upward trend is expected to be maintained. As a key basis, when estimating the trend of average selling price (ASP) based on production volume, demand for high value-added products remains solid. Sales of major products in the second quarter are projected to grow by 10% year-on-year for Rinopin and 4% for Rinosocket.
The second quarter is viewed as the starting point of the peak season along with the benefits from artificial intelligence (AI). The blooming AI market → increased demand for high value-added chips → increased demand for sockets and pins is expected to bring benefits. IT (smartphone) demand recovery is forecasted for 2024, with accelerated growth in 2025. Researcher Oh Kang-ho analyzed, "During the past 5G-based device demand period, we experienced simultaneous increases in price and quantity," adding, "AI is expected to accelerate growth even more due to greater scalability and increased technical difficulty compared to 5G."
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