[Click e-Stock] "Record Earnings Expected Again This Year... Target Price Maintained"

On January 9, LS Securities maintained its "Buy" investment rating and target price of 40,000 won for Daeyang Electric. The previous day's closing price was 26,500 won. On this day, LS Securities analyst Jung Hongsik stated, "Both sales and operating profit are expected to reach record highs again this year, following last year."

Regarding the factors driving sales growth, analyst Jung explained, "In the ship lighting segment, new orders increased from 63 billion won in the third quarter of 2024 to 67.6 billion won during the same period last year, indicating that growth is well-supported by favorable conditions in downstream industries. Additionally, in the automotive ESC (Electronic Stability Control) sensor segment, supply to Chinese companies began in the first and third quarters of last year, in addition to existing domestic clients. This year, supply to about two more Chinese companies is planned."

On the factors behind operating profit growth, analyst Jung said, "The proportion of sales from the automotive sensor segment, which has relatively high profitability, is expected to rise from 12.0% in 2024 to 16.4% last year and 19.4% this year. Improved operating margin is being driven by a reduction in the proportion of fixed costs as sales increase."

The automotive sensor business continues to experience high growth. Sales in this segment grew at an average annual rate of 37.1%, from 9.1 billion won in 2021 to 23.6 billion won in 2024, with last year's sales expected to reach 37.9 billion won (a 60.8% increase year-on-year). Analyst Jung attributed this to the adoption of ESC sensors for global electric vehicles by client companies, expanded supply to finished car manufacturers, and new supply agreements with local Chinese companies.

The potential for dividend increases is also drawing attention. The dividend payout ratio for 2024 was at a low level of 4.7% (100 won per share). Analyst Jung noted, "There is potential for dividend increases based on stable cash flow. Net cash rose from 66.5 billion won in 2022 to 109 billion won in the third quarter of 2025, and average capital expenditure over the past three years was around 8 billion won. Expectations for higher dividends per share are rising."