[Click e-Stock] "Leeno Industrial Performed Well Even in the Off-Season, Now Entering Peak Season"

Clear Performance Improvement... Expected to Benefit from AI Smartphones

Even during the off-season, Leeno Industrial achieved solid results, and it is now expected to further expand its performance as it enters the peak season. Analysts attribute this to an increase in artificial intelligence (AI)-related product lines and the company's dual benefit from the recovery of the smartphone market.

On May 22, KB Securities raised its target price for Leeno Industrial by 9.6% to 57,000 won, citing these factors. The previous day's closing price was 39,400 won. The investment opinion was maintained as 'Buy'.

In the first quarter of this year, Leeno Industrial posted sales of 78.4 billion won and operating profit of 34.9 billion won. These figures represent increases of 43.0% and 50.0%, respectively, compared to the same period last year, and exceeded market consensus. While overall smartphone demand grew slowly, the launch of new entry-level models and new AP chips by its major client, Samsung Electronics, were credited as key drivers of performance.

The company is expected to maintain strong growth in the second quarter as well. KB Securities forecasts that Leeno Industrial will record sales of 83.6 billion won and operating profit of 38.8 billion won in the second quarter of this year. Compared to the same period last year, sales are estimated to increase by 17.8% and operating profit by 16.9%. This is because Samsung Electronics' smartphone mass production sales are typically recognized in the second and third quarters. Medical-related sales, which exceeded 10 billion won in the first quarter thanks to higher average selling prices (ASP), are also expected to remain robust throughout the year.

Lee Euijin, a researcher at KB Securities, explained, "This year, the smartphone market is expected to grow by 3.2% year-on-year, driven by a recovery in demand from the Greater China region and the rise of AI smartphones. As a result, Leeno Industrial's smartphone AP-related performance, which accounts for 60-70% of its total sales, will gradually recover. Additionally, the company will generate new mass production sales by securing new non-memory customers this year."