[Click eStock] "ITM Semiconductor, Global No.1 Company in Secondary Battery Protection Circuits"

[Asia Economy Reporter Eunmo Koo] KB Securities analyzed that ITM Semiconductor, the global No.1 company in secondary battery protection circuits, is expected to be installed in electric vehicles in the future, showing promising mid- to long-term growth potential. The investment opinion and target price were given as ‘Buy’ and 80,000 KRW, respectively.

On the 24th, KB Securities researcher Changmin Lee stated in a report, “ITM Semiconductor, the global No.1 in lithium-ion secondary battery protection circuits, holds a monopolistic position in the PMP (Protection Module Package) market,” adding, “PMP can reduce the size of existing protection circuits by up to 50% and improve power efficiency by 60%, expanding its application from wireless earphones to smartphones, laptops, and more.” In particular, the number of new models from North American clients equipped with PMP is expected to double compared to last year starting this year, forecasting simultaneous effects of price increases and shipment growth over the next three years.

Furthermore, the researcher said, “Starting with the expansion of medium- and large-sized battery protection circuits and BMS business in the second half of this year, installation in electric vehicles is expected within 2 to 3 years, securing mid- to long-term growth potential,” and predicted, “Accordingly, the average selling price (ASP) growth rate over the next three years is estimated at 30% annually.”

ITM Semiconductor’s sales and operating profit for this year are expected to reach 576.3 billion KRW and 80.5 billion KRW, up 45% and 51% year-on-year respectively, marking an all-time high performance. Operating profit for next year is also estimated to increase by 48% year-on-year to 118.8 billion KRW, indicating that the clear profit growth trend is likely to continue for the time being. The researcher explained, “From the third quarter of this year, the new factory operation in Vietnam will increase PMP production capacity by 50% compared to 2018, shipments of wireless earphones from North American clients are expected to double in two years, and the multi-model strategy of North American clients is expected to double the number of new smartphone models in 2021.”

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