"Hinge Applications Expanding... Growing Expectations for KH Vatec's Growth"[Click e-Stock]

Expansion of Hinge Applications Beyond Smartphones
Growth in Automotive Electronics and New Device Segments

KH Vatec achieved solid second-quarter results driven by growth in its smartphone hinge product business. There are expectations that hinge sales will continue to grow in the third quarter and beyond, leading to strong performance.

On September 3, Meritz Securities raised its target price for KH Vatec by 13.3% to 17,000 won, maintaining its "Buy" rating based on this outlook. The previous day's closing price was 12,610 won.

In the second quarter of this year, KH Vatec reported consolidated sales of 136.5 billion won and operating profit of 11.6 billion won. This represents growth of 34.4% and 36.0%, respectively, compared to the same period last year. Despite continued sluggish demand for finished sets, growth was driven by an increase in the average selling price (ASP) of hinges and expanded supply of titanium cases for Galaxy Edge models. However, due to foreign exchange pressures and increased development costs for automotive-related products, results fell short of the market consensus of 12.7 billion won in operating profit.

Solid results are also expected in the third quarter. Meritz Securities forecasts sales of 152.6 billion won and operating profit of 12.4 billion won, representing year-on-year growth of 65.3% and 79.6%, respectively. Based on strong consumer response, it has been identified that after this year's launch, orders for Galaxy Fold model components have already increased by about 500,000 units. As competitors are struggling to respond to slim hinge models, KH Vatec is expected to benefit significantly. Although titanium case sales are entering the off-season, increased sales for automotive electronics are expected to partially offset this. The start of mass production for dual-folding products is also considered a positive factor.

It is also positive that the use of hinge products is expanding beyond smartphones to new applications such as rollable devices for vehicles. Yang Seungsoo, a researcher at Meritz Securities, explained, "Starting with the launch of dual-folding products, changes in hinge technology will continue, including the introduction of slidable and new form factors," adding, "Structurally, this will lead to an increase in KH Vatec's hinge ASP and strengthen its entry barriers."

On the 15th, a customer visiting the KT Plaza Gwanghwamun Central Branch in Jongno-gu, Seoul, is experiencing Samsung Electronics' Galaxy Z Fold7. KT announced that from the 15th to the 21st, pre-orders for the Galaxy Z Fold7 and Galaxy Z Flip7 will be available at KT stores nationwide and on KT.com. July 15, 2025. Photo by Kang Jinhyung