[Click eStock] "Jahwa Electronics Diversifies Camera Parts Sales... Expecting Return to Profitability"

Daishin Securities Report
Target Price Raised by 32%

[Asia Economy Reporter Minji Lee] Daishin Securities maintained a buy rating on Jahwa Electronics on the 6th and raised the target price by 32% from the previous level to 26,500 KRW.

This year, Jahwa Electronics is expected to return to profitability after three years, recording an operating profit of 20.1 billion KRW through diversification of sales in Optical Image Stabilization (OIS) components. Sales are estimated to increase by 31.7% year-on-year to 389.5 billion KRW. Kangho Park, a researcher at Daishin Securities, said, “This is a full-fledged turnaround period with a high possibility of additional OIS sales,” adding, “Considering the expected sales of automotive components next year, further stock price increases are also possible.”

This year is expected to reflect the early launch effect of Samsung Electronics’ Galaxy S21. The proportion of the Ultra model is estimated to have increased from 25% last year to 40% this year, which likely led to a corresponding increase in OIS sales. Samsung Electronics is also expected to apply OIS to higher-end models of the Galaxy A series, its first foray into budget models.

The Ultra model equipped with OIS is highlighted as a premium model differentiation factor with a 100-megapixel camera and enhanced high-zoom capabilities. Exports to China are also expected to increase, and this year, Jahwa Electronics’ actuator sales, including OIS, are estimated to have risen by 49.6% year-on-year to 345.7 billion KRW.

Researcher Park said, “Samsung Electronics’ premium models are expected to apply the encoded type OIS jointly patented by Jahwa Electronics, Samsung Electronics, and Samsung Electro-Mechanics, and Jahwa Electronics has an advantage in terms of cost competitiveness,” adding, “It is also positive that Chinese smartphone manufacturers are focusing on upgrading high-zoom functions in premium models by applying encoded type OIS.”

Next year, sales of PTC heaters (high-voltage PTC heaters), an automotive component, are expected to be fully reflected. Supplying PTC to Hyundai Motor’s dedicated electric vehicle platform, PTC sales are projected to reach 56.3 billion KRW next year and increase to 71.6 billion KRW in 2023. The sales proportion is also expected to grow from 4.3% this year to 13.3% in 2023.

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