[Click e-Stock] "Fine M Tech: Structural Shift in Foldable Phone Market... Significant Upside Potential"

On June 18, Hanyang Securities analyzed that Fine M Tech's potential for mid- to long-term growth is becoming more prominent amid structural changes in the foldable phone market.

Lee Junseok, a researcher at Hanyang Securities, stated, "Last year, the foldable phone market entered a phase of structural transition, with the global market share of domestic companies falling from 55.1% in the previous year to 32.9%. This indicates a shift from an oligopolistic structure to a multi-player competitive landscape."

Fine M Tech's consolidated results for the first quarter of this year showed sales of 43.58 billion KRW, a decrease of 0.2% compared to the same period last year, and an operating loss of 2.95 billion KRW, continuing its deficit. The growing preference for flagship smartphones equipped with AI features led to a relative decline in demand for foldable phones, while inventory adjustments by major domestic smartphone manufacturers also affected shipment volumes.

Lee explained, "Consumers are prioritizing flagship models in terms of performance, durability, and AI utilization. Additionally, the rise of mid- to low-end Chinese brands has contributed to the contraction in demand for foldable phones."

However, with the introduction of AI features in foldable phones, the possibility of a future recovery in demand remains valid. He forecasted, "If customer companies expand their product lineups with new foldable phone models in the second half of the year, the increased consumer choices could serve as a catalyst for a market rebound."

While the overall market has entered a temporary adjustment phase, a recovery is expected in the long term. Lee emphasized, "With the expansion of AI feature adoption and visible improvements in technological maturity, the foldable phone market is expected to re-enter a high-growth trajectory after 2026. In particular, as AI-based foldable-specialized UX gains prominence, the technology is evolving beyond a simple smartphone alternative to one that can expand into the tablet and mid-sized device segments, indicating a structural change in the market."

The potential entry of North American smartphone companies into the market is also a variable. Lee added, "Given the current foldable phone penetration rate of around 2%, this is more likely to contribute to market expansion rather than intensifying competition. At present, this is interpreted as a transitional signal of accelerated market restructuring, and competitiveness is expected to be reassessed depending on future technological and pricing differentiation."

Fine M Tech's downside risk appears to be limited. Lee noted, "Since the company's main product, the built-in hinge, is more sensitive to quantity than ASP, the downside to results should be limited even amid slowing demand." He also positively evaluated the company's technological capabilities, as evidenced by the large-scale supply contract for ESS end plates in North America signed in March.

Having a stable supply reference for domestic foldable phone manufacturers also supports future opportunities. Lee stated, "If North American companies enter the foldable phone market in the second half of 2026, Fine M Tech is expected to be among the biggest beneficiaries. This could serve as a key variable for market expansion and act as a catalyst for the company's mid- to long-term growth."