[Click eStock] "Deoksan Neolux, Recent Sharp Drop Overdone... Should Utilize Low-Price Buying"

On the 14th, BNK Investment & Securities diagnosed that the recent sharp decline in Duksan Neolux was excessive and that it should be used as a buying opportunity at a low price. The investment opinion was maintained as 'Buy,' but the target price was lowered from the previous 48,000 KRW to 36,000 KRW.

Duksan Neolux reported third-quarter results with sales increasing by 17% year-on-year to 54.9 billion KRW, and operating profit rising by 3% during the same period to 12.6 billion KRW. Both sales and operating profit slightly missed market expectations. Minhee Lee, a researcher at BNK Investment & Securities, explained, "Although the expectations were slightly missed, excluding one-time expenses such as bonus reserves, the actual operating profit margin exceeded 25%."

For the fourth quarter, sales are expected to decrease by 9% quarter-on-quarter to 49.9 billion KRW due to reduced mobile demand, but operating profit is forecasted at 12.9 billion KRW with an operating profit margin of 25.8%, which is considered favorable. The researcher added, "The operating profit margin might be better than expected due to partial reversal of bonus reserves and exchange rate increases," and "Meanwhile, next year, the OLED (organic light-emitting diode) material model for North American customers is expected to be upgraded."

She further stated, "With customer diversification and an increased proportion of high value-added products, stable performance growth and profitability seem achievable," and added, "The recent sharp decline in stock price due to concerns over front-end demand appears excessive, so it is necessary to take advantage of this low-price buying opportunity."