[Click e-Stock] "BH Needs to Adjust Performance Expectations This Year... Target Price Lowered"

Target Price Lowered by 27% from Previous Estimate

On June 4, Shinhan Investment & Securities stated that it is necessary to adjust expectations for BH's performance this year, and lowered its target price from 26,000 won to 19,000 won. The investment opinion of 'Buy' was maintained.

Oh Kangho, an analyst at Shinhan Investment & Securities, said, "We have lowered our target price by 27% compared to the previous estimate, reflecting a downward revision of this year's performance and changes in estimates to focus on expected growth in 2026." He explained, "BH recorded an operating loss in the first quarter of this year, and although a turnaround to profit is expected in the second quarter, results are projected to be weaker than last year, so it is necessary to adjust performance expectations for this year."

BH posted an operating loss of 25.4 billion won in the first quarter of this year. Analyst Oh attributed the weak performance to three main factors: a price cut for legacy models from major clients, sluggish flexible printed circuit board (FPCB) demand related to electric vehicles, and a slowdown in IT solutions growth. He forecast this year’s operating profit at 58.2 billion won, a 33% decrease from the previous year.

However, he views the second half of the year as a buying opportunity. Oh stated, "There is sufficient momentum, including confirmation of a performance bottom, the launch of new foldable products by global companies in 2026, and the expansion of OLED-applied devices." He added, "With performance expected to improve next year, we consider the second half of this year to be a buying range."

For a rebound in the share price, he analyzed that a recovery in demand and the adoption of new products are necessary. Oh said, "The key to a share price rebound will be an increase in both price (P) and quantity (Q) through demand recovery and the adoption of new products and models." He continued, "Although expectations for new product launches are not high due to tariff uncertainties and concerns about the economy, the momentum for improvement in flagship demand driven by enhanced artificial intelligence (AI) features remains valid. Global flagship shipments increased by 20% in the first quarter, and with the expected launch of global foldable products in the second half of 2026, a re-evaluation of performance and valuation is fully possible."