[Click eStock] Duksan Neolux, Multiple Growth Points Through Next Year "Sufficient Upward Momentum"

[Asia Economy Reporter Lee Seon-ae] Yuanta Securities announced on the 14th that it maintains a 'Buy' investment rating and a target price of 56,000 KRW for Duksan Neolux, citing significant growth potential.

The expected performance for the first quarter of this year forecasts sales of 38.7 billion KRW (-10.9% QoQ, +22.0% YoY) and operating profit of 10.9 billion KRW (-23.8% QoQ, +59.6% YoY), indicating strong results. The launch timing of the Galaxy S21 was advanced, and strong sales of the iPhone 12 series continued, which helped maintain material supply despite the seasonal off-season. Shipments of the new material structure M10R for notebook PCs are estimated to have started in earnest from March.

There are still many growth points. Samsung Display's shipments of OLED panels for notebook PCs and tablets are expected to increase by +400% and +5% respectively compared to the previous year. Both applications use M10R material, which is expected to be fully reflected in performance from the second quarter. Thanks to increased sales to IT products, sales of 181.9 billion KRW (+26.3% YoY) and operating profit of 53.5 billion KRW (+33.6% YoY) are expected to be achievable this year.

The expansion of the small and medium-sized OLED base into the IT product (notebook PC/tablet) market is still in its early stages, creating a new front market for Duksan Neolux beyond the existing smartphone market. In particular, IT products have an area increase effect equivalent to 3 to 6 smartphones per unit, which has a greater ripple effect than the increase in the number of material selections within the material structure. Starting next year, with Apple also participating, Duksan Neolux’s material supply volume is expected to continue increasing. So far, the adoption of new display technologies has proceeded in the order of ‘Samsung adoption → market expansion → Apple adoption → additional market expansion,’ and a similar trend is expected in IT products. Apple completed OLED adoption for all models in the iPhone 12 series last year, making expansion into IT products such as iPad → MacBook (2023) → iMac (2024) highly likely from next year. Apple’s OLED adoption in IT products is expected to create a market size more than twice the current level.

Researcher Kim Kwang-jin of Yuanta Securities explained, "The possibility of adopting an RGB Tandem structure is an additional growth factor. The Tandem structure consists of double layers of RGB emission layers, which is likely to be increasingly adopted to improve luminance, and in this case, material usage doubles compared to the existing amount." He added, "Besides this, there are many points for additional growth in the second half of the year with Nintendo Switch and in the first half of next year with QD-OLED, so the upside potential remains sufficient."

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