[Click eStock] "BH, Excessively Undervalued Considering Mid- to Long-Term Growth Potential... Target Price Down"

Target Price Revised Down from 35,000 Won to 32,000 Won

On the 13th, NH Investment & Securities evaluated BH as being excessively undervalued considering its mid- to long-term growth potential. Taking into account the decline in valuations of global peers, the target price was lowered from 35,000 KRW to 32,000 KRW, while maintaining a 'Buy' investment rating.

Researcher Lee Gyu-ha of NH Investment & Securities explained, "Considering the decline in valuations of global peers due to the expansion of global macroeconomic uncertainties, we lowered the target price-to-earnings ratio (PER) from 10 times to 9 times and adjusted the target price downward. However, we maintain the investment rating as we expect a continuous increase in smartphone shipments from client companies and high mid- to long-term growth potential in IT organic light-emitting diode (OLED) and foldable smartphones."

Regarding concerns about new smartphone products from North American companies to be released in the second half of the year, Researcher Lee said, "The replacement cycle combined with expectations for artificial intelligence (AI) will result in sales exceeding expectations. Additionally, in 2025, with AI becoming more advanced and the release of slim models and other form factor changes planned, the sales growth trend is expected to continue." He added, "Not only smartphones but also OLED applied to tablets is expected to see steady shipment increases for BH due to the expansion of applicable models and applications. The foldable smartphones from North American clients are also likely to be released as early as the second half of 2026, which is expected to lead to price increases in the future."

Record-high performance is expected next year. Researcher Lee stated, "Thanks to steady core business and a turnaround in profits from the automotive electronics division including wireless charging, BH is expected to achieve an operating profit of 151.6 billion KRW next year, marking its highest-ever performance. In the third quarter of this year, results meeting market expectations are also anticipated due to increased shipments and market share of client companies."

Considering mid- to long-term growth potential, BH is seen as excessively undervalued. Researcher Lee analyzed, "Due to the recent overall decline in IT sector stock prices, BH’s stock price has fallen to a PER of 5.7 times based on 2025 earnings per share, reaching valuations seen at the COVID-19 low point. Given the possibility of strong sales of new models in the second half of the year and the mid- to long-term growth potential of IT OLED and foldable smartphones, we judge this as an excessively undervalued range."