[Click eStock] Jaeyoung Solutec, First Mover in Hybrid OIS... "Profitability Improvement on Track"

On May 27, independent research firm ValueFinder evaluated Jaeyoung Solutec as a first mover in hybrid optical image stabilization (OIS) technology. The firm did not provide an investment opinion or target price.

Lee Choongheon, CEO of ValueFinder, stated, "As the adoption rate of high-end actuators in smartphones increases, the proportion of OIS-equipped devices offering auto focusing functionality is also rising. As of 2024, the OIS adoption rate at Samsung Electronics is estimated to have expanded to 51%."

Jaeyoung Solutec first entered the OIS market with the FE model of the Galaxy flagship S series, and based on this achievement, has expanded its OIS supply to selected S and A series models. In anticipation of growing OIS demand, the company proactively increased the production capacity of its Vietnamese subsidiary, Jaeyoung VINA.

Lee added, "With the increase in high value-added OIS mass production, the utilization rate is expected to rise significantly from the second half of the year. We anticipate improved sales volume and profitability, projecting a performance trend of 'low in the first half, high in the second half.'"

The company, in collaboration with Samsung Electronics, has developed the next-generation 'hybrid OIS.' This product performs both AF and OIS functions through a simplified up-down and left-right movement structure, enabling a reduction in manufacturing costs. In addition, the reduction in height is a significant advantage for making smartphones slimmer.

ValueFinder analyzed, "Hybrid OIS received mass production approval in January this year and is currently being supplied exclusively to the client. As the mass production is still in its early stages and yield rates are being stabilized, we estimate that this has had some impact on first-quarter profitability."

The firm further forecast, "In the second half of the year, as yield rates recover, profitability is expected to improve. We anticipate that application will expand to next-generation Galaxy series models and other lineups going forward."

Additionally, ValueFinder noted, "With 13 billion KRW in cash-equivalent assets and approximately 100 billion KRW in real estate and idle land holdings, we do not see overhang risk as a major concern. It is also a positive signal that CEO Kim Seungjae, the largest shareholder, has consistently increased his stake through on-market purchases over the past several years."