[Click eStock] "Seoul Semiconductor, Profit Improvement Expected in Second Half of This Year"

On the 17th, Daishin Securities stated that LED manufacturer Seoul Semiconductor, which posted an operating loss in the fourth quarter of last year, is expected to see improvements in sales and profits in the second half of this year rather than the first half. The investment rating was maintained at Marketperform (below Buy), and the target price was kept at 10,000 KRW.

Seoul Semiconductor announced on the 14th that its sales in the fourth quarter of last year were 268.4 billion KRW, down 10.8% compared to the third quarter, and operating profit returned to a loss of -2.09 billion KRW. Although sales to the automotive electronics sector increased compared to the same period last year, demand in the lighting and LED TV segments weakened, and intensified competition remained a burden.

Daishin Securities also forecasted an operating loss (-3.2 billion KRW) for the first quarter of this year. It is expected that the off-season timing and sales slowdown in the IT and lighting sectors will increase the burden of fixed costs.

Seoul Semiconductor's sales last year were 1.093 trillion KRW, up 5.9% year-on-year, and operating profit turned positive at 2.2 billion KRW. Daishin Securities estimates that this year's sales will increase by 1.4% to 1.108 trillion KRW, and operating profit will rise 332% to 9.5 billion KRW.

Analyst Park Kang-ho said, "Sales and profits are expected to improve in the second half of this year rather than the first half," adding, "In the short term, the effect of China's 'Yiguhwanxin' (subsidies for IT device purchases) and, in the mid-to-long term, sales growth from Micro LED are anticipated."