[Click e-Stock] "SL Target Price Raised to 54,000 Won...Earnings and Robotics Outlook"

On December 22, NH Investment & Securities raised its target price for SL, a company specializing in automotive parts, to 54,000 won. This upward revision reflects expectations for a significant improvement in earnings following new car launches in the fourth quarter, as well as optimism regarding SL's new robotics business.

In a report released the same day, Haneul, an analyst at NH Investment & Securities, stated, "The company is undergoing a valuation rerating due to positive earnings prospects and the new robotics business."

Haneul first highlighted the growing anticipation surrounding SL's robotics business. He explained, "SL currently supplies leg assemblies for quadruped robots and indicator lamps for logistics robots to global robotics clients, and provides LiDAR and BPA to domestic robotics customers. The company plans to expand its business scope to include humanoid robots in the future."

Fourth-quarter sales and operating profit are estimated to reach 1.2646 trillion won and 48.2 billion won, respectively, representing year-on-year increases of 2.2% and 17.9%. Haneul noted, "While the domestic market is expected to underperform due to fewer business days in October because of holidays, we anticipate improved results in North America and India. New car launches by clients will begin in the fourth quarter, driving continued top-line growth." He added, "Profitability is also expected to gradually improve as component tariff refunds from clients become more substantial."

Accordingly, Haneul maintained a 'Buy' rating on SL and raised the target price to 54,000 won. This is based on a 12-month forward earnings per share (EPS) and a target price-to-earnings ratio (PER) of 7.4 times. The target PER was derived by applying a 45% discount to the 12-month average PER of global lamp manufacturers.