[Click eStock] "Iljin Electric, Profitability Improvement and Expansion Effects Next Year"

SK Securities analyzed on the 3rd that Iljin Electric is expected to see the effects of expansion next year amid continued sales growth. They maintained a 'Buy' rating and a target price of 40,000 KRW.

Iljin Electric recorded sales of 434 billion KRW and an operating profit of 25 billion KRW in the second quarter. This represents increases of 42.7% and 86.7%, respectively, compared to the same period last year. Naminsik, a researcher at SK Securities, said, "The sales in the cable division significantly exceeded expectations," adding, "In addition to sales growth, the operating profit margin improved due to an increase in exports of high-voltage cables with better margins."

SK Securities expects operating profit to reach 98 billion KRW this year and 140 billion KRW next year. He emphasized, "Performance improvement from expansion is expected from the second half of next year," and added, "The company operates the medium-to-large power equipment production, which is rapidly improving profitability, along with the cable division, which is expected to see performance growth in the latter part of the cycle."

He also stated, "Iljin Electric is constructing a new factory in Hongseong, and growth from expansion is expected from the second half of next year," emphasizing, "The incremental sales from capacity (CAPA) expansion are estimated to be around 400 billion KRW."