[Market Focus] KH Vatec Expands Beyond Foldable Smartphones to Vehicles...Hinge Demand on the Rise

KH Vatec is showing strong performance. This is believed to be influenced by securities firms' analysis that, in addition to the growth potential of its smartphone hinge products, the company is expanding its product applications to new areas such as automobiles.

As of 1:41 p.m. on September 3, KH Vatec was trading at 13,660 won, up 8.33% from the previous day.

On this day, Meritz Securities forecast that in the third quarter of this year, KH Vatec will record sales of 152.6 billion won and operating profit of 12.4 billion won. This represents growth of 65.3% and 79.6%, respectively, compared to the same period last year.

Based on favorable consumer response, it is understood that after the launch of the Galaxy Fold model this year, the number of component orders increased by approximately 500,000 units. Since competitors are struggling to respond to slim hinge designs, it is analyzed that KH Vatec will be the main beneficiary of this trend. Although sales of titanium cases are entering the off-season, the increase in automotive component sales is expected to offset this to some extent. The start of mass production of double-folding products is also cited as 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 double-folding products, changes in hinge technology will continue with 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."