[Click eStock] "Strong 1Q Performance of Deoksan Neolux, Growth Expectations Rise in 2H"

Strong 1Q Performance for iPhone 12 and Galaxy S21
Growth Expectations Rise in 2H with Expanded OLED Adoption

[Asia Economy Reporter Minwoo Lee] Duksan Neolux is expected to achieve solid performance even in the off-season first quarter. The strong sales of the delayed launch iPhone 12 and the early release of the Galaxy S21 are interpreted as having a positive impact. Although it is expected to slow down somewhat in the second quarter, which is the peak off-season, steady growth is anticipated from the second half of the year.

On the 20th, Cape Investment & Securities maintained a 'Buy' rating on Duksan Neolux with this background and raised the target price by 40% to 56,000 KRW. The closing price on the previous trading day was 41,150 KRW.

Cape Investment & Securities forecasted that Duksan Neolux will record sales of 42.7 billion KRW and operating profit of 11.6 billion KRW in the first quarter of this year. This represents increases of 34.3% and 68.1%, respectively, compared to the same period last year. Although sales are expected to decrease by 1.8% and operating profit by 19.5% compared to the previous quarter, the company is evaluated to have recorded solid performance exceeding market expectations despite the off-season. According to financial information analysis firm FnGuide, the market consensus for Duksan Neolux's first-quarter performance was sales of 38.1 billion KRW and operating profit of 10.5 billion KRW.

Researcher Seongsun Park of Cape Investment & Securities explained, "Despite the off-season, OLED material demand remained solid due to strong sales and continued production of the delayed launch iPhone 12, and the early release of the Galaxy S21 also had a positive effect. The second quarter is the worst off-season when the effects of iPhone and Galaxy disappear, but the market is already aware of this."

From the second half of the year, steady growth is expected to continue. Although there are concerns about supply disruptions in semiconductors and smartphone components across the market, the impact on Apple's iPhone production is expected to be limited. The strong sales of the iPhone 13 in the second half are also seen as positive.

OLED panels are increasingly being applied to laptops. Researcher Park stated, "Lenovo, Asus, and Samsung Electronics have released OLED laptops, and it is understood that Samsung Display supplies most of the OLED panels. OLED application is also expected to expand to tablets such as the iPad in the future, and the increasing penetration rate of foldable smartphones is a factor that raises customer expectations for new OLED line expansions."

The mass production of next-generation Quantum Dot (QD) OLED panels is also a noteworthy issue. Since the material consumption per area is significantly higher compared to smartphones, it is expected to benefit from increased market demand in the second half of the year. Researcher Park suggested, "With the expansion of OLED applications and the mass production of OLED panels by Chinese panel companies, high performance growth is expected next year as well. We recommend increasing exposure focusing on the second half and next year's performance."

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