[Click eStock] "JNTC, Attractive Expansion Potential of 3D Glass"

[Asia Economy Reporter Eunmo Koo] JNTC recorded strong performance in the first quarter of this year despite external variables. Considering the expansion potential of 3D cover glass into foldable and automotive applications, the long-term growth potential is expected to be high.

JNTC, established in 1996, is a manufacturer of mobile phone components such as cover glass and connectors. As of last year, the main business sales composition was 67% 3D cover glass, 23% connectors, and 10% other camera window glass. The company started its tempered glass business in 2010 and possesses the technology to mass-produce 3D cover glass for the first time in the world in 2013. Since 2019, it has supplied cover glass exclusively to smartphone manufacturers in the Greater China region.

According to Hanwha Investment & Securities on the 22nd, JNTC is expected to maintain its strong performance trend in the first quarter of this year. JNTC recorded sales of 104.9 billion KRW and operating profit of 36.9 billion KRW in Q1. The sales proportion of 3D cover glass increased to 71.3%, contributing to improved profitability. Junhwan Kim, a researcher at Hanwha Investment & Securities, analyzed in a report on the same day, “3D glass is a component that only four global companies, including JNTC, can mass-produce. Considering the high process technology and investment cost (approximately 80 billion KRW per 1 million units per month), the risk of vendor diversification is not significant.”

He also stated, “Although concerns about the decline in smartphone market share of major Greater China customers have resurfaced due to the US-China trade dispute, the overseas sales proportion of these key customers is currently below 40%, which is about 10 percentage points lower than after the first US-China dispute began in Q1 last year. Considering that flagship sales of P and Mate series for Greater China customers in 2019 reached approximately 44 million units, a 53% increase compared to the previous year, it is highly likely that JNTC’s strong performance trend will be maintained.”

The long-term growth potential is also highly rated. Based on this year’s consensus, expected performance is sales of 520 billion KRW and operating profit of 115 billion KRW. Researcher Kim said, “The expected price-to-earnings ratio (PER) for this year is about 7.4 times, trading at approximately a 37% discount compared to the mobile phone parts industry average PER of 11.7 times due to the high single-customer sales proportion and macroeconomic uncertainties.” However, he analyzed, “In the future, 3D cover glass can demonstrate expansion potential into various applications such as foldable phones and automotive use, indicating high long-term growth potential.”

This content was produced with the assistance of AI translation services.