[Click eStock] "Solum, Earnings Expected to Be Lower in the First Half and Higher in the Second Half This Year... Operating Profit to Surpass 120 Billion Won"

On the 19th, KB Securities forecasted that SoluM's performance this year will show a low-high pattern, with total operating profit surpassing 120 billion KRW, a 75% increase compared to the previous year.

Lee Chang-min, a researcher at KB Securities, analyzed, "SoluM's first-quarter performance this year is estimated at sales of 391.2 billion KRW (+2% year-on-year) and operating profit of 12.4 billion KRW (-39% year-on-year, operating margin 3.2%), which is expected to fall short of market consensus. While power module performance is expected to be favorable, the recovery of 3in1 board sales is delayed."

Additionally, the core business ESL (Electronic Shelf Label) is also expected to see sales growth compared to the same period last year and the previous quarter, but the increase is projected to be limited.

The performance rebound is expected to begin in earnest from the third quarter of this year. The researcher explained, "Quarterly ESL sales for SoluM are forecasted at 117.5 billion KRW in Q1, 137 billion KRW in Q2, 203.9 billion KRW in Q3, and 192.3 billion KRW in Q4. In particular, as local sales personnel are expanded in Europe and North America, labor cost burdens may increase, potentially causing some profitability weakness."

Annual performance this year is expected to reach sales of 1.8 trillion KRW (+13% year-on-year) and operating profit of 120.6 billion KRW (+75% year-on-year, operating margin 6.7%). The researcher stated, "The cumulative order amount for ESL continues to increase, and as of Q3 last year, the cumulative order backlog for the next three years reached 1.95 trillion KRW, with annual sales expected to expand to 650.7 billion KRW (+48% year-on-year)."

Especially, with the second half of this year expected to account for 61% of performance, a 'low-high' trend is anticipated. From a profitability perspective, there is potential for further improvement if the Red Sea situation normalizes. The researcher added, "Recently, as the U.S. government has intensified attacks on the Houthi rebels, expectations for resolving Middle East logistics issues are growing. For SoluM, a quarterly performance improvement effect of around 3 to 4 billion KRW is expected."