[Click eStock] "Leeno Industrial Expected to Expand Mass Production Socket Market Share... Target Price Maintained"

On May 15, Korea Investment & Securities maintained its "Buy" rating and target price of 45,000 won for Leeno Industrial, stating that "the story of expanding mass production socket market share is being validated."

On this day, Park Sanghyun, a researcher at Korea Investment & Securities, said, "The target price was calculated by applying a target price-to-earnings ratio (PER) of 25 times to the 12-month forward earnings per share (EPS)."

In the first quarter, Leeno Industrial recorded sales of 78.4 billion won, up 42.9% from the same period last year, and operating profit of 34.9 billion won, up 49.9% (operating margin of 44.6%), exceeding the market consensus.

Researcher Park noted, "Test socket sales increased by 70% to 48.1 billion won, showing that Leeno Industrial's pogo pins, which have mainly been used for research and development (R&D) test sockets, are now being increasingly adopted for mass production test sockets as well."

He added, "A notable trend in this year's smartphone market is the expansion of quasi-premium smartphone distribution equipped with premium application processors (APs) to support on-device artificial intelligence (AI)," and said, "This is positive, as it leads to increased demand for Leeno Industrial's pogo pins, which offer high inspection accuracy."

In particular, the expansion of mass production sales, which was speculated as the reason for the strong performance in the fourth quarter of last year, is being validated by the first quarter results. Park explained, "Regardless of the satisfaction perceived by users, smartphone manufacturers are using on-device AI as a key marketing point for new products," and added, "They are even expanding the distribution of on-device AI smartphones by pursuing a strategy of increasing the quasi-premium segment, which involves lowering set prices."

Additionally, Park stated, "The shipment volume of on-device AI-supported smartphones equipped with premium APs will continue to increase," and added, "Accordingly, the penetration rate of Leeno Industrial's mass production test sockets, which can accurately inspect high-performance APs, will also begin to expand in earnest."