[Click eStock] "Samwha Capacitor Reports Weak Q2 Results... Target Price Lowered"

On August 25, iM Securities analyzed that Samwha Capacitor's profitability was weak in the second quarter due to sluggish demand in downstream industries. The company maintained its 'Buy' investment rating but lowered its target price to 34,500 won.

On a consolidated basis, Samwha Capacitor posted sales of 78.8 billion won and operating profit of 5.6 billion won in the second quarter. While sales increased by 3.0% compared to the same period last year, operating profit declined by 27.3%.

Lee Sangheon, a researcher at iM Securities, stated, "Despite solid sales growth in FC (Film Capacitor) and automotive capacitors (DC-LINK CAPACITOR), profitability was weak due to adverse exchange rates and sluggish downstream industries. However, as the third quarter is a seasonal peak, we expect a partial recovery in downstream industries and visible improvement in performance."

He also anticipated that sales of automotive capacitors would begin in earnest from next year. Automotive capacitors are used in power electronic system circuits for power conversion, including voltage stabilization, ripple current removal, inverter circuit protection, and converting DC power to AC power. They are mainly applied in eco-friendly vehicles such as hybrids, electric vehicles, and hydrogen vehicles.

Lee Sangheon emphasized, "Samwha Capacitor will begin supplying automotive capacitors to Hyundai Motor Group by the end of this year. As order volumes from customers such as German automakers and Hyundai Motor Group are expected to ramp up from next year, not only profitability but also growth is expected to accelerate."