[Click eStock] "Seojin System Expected to Achieve Highest Quarterly Sales in Q3"

Profitability Improvement Expected After Weak Q3
Yujin Investment & Securities Maintains Seojin System Target Price at 52,000 Won

[Asia Economy Reporter Gong Byung-sun] Seojin System is expected to record its highest quarterly sales this year in the third quarter. High performance growth is also anticipated next year.

On the 28th, Eugene Investment & Securities estimated Seojin System's Q3 sales to be 172.8 billion KRW, a 100.7% increase compared to the same period last year, and operating profit to turn positive at 18.7 billion KRW during the same period. This marks another record-high sales figure following the previous quarter.

Profitability is expected to improve significantly in Q3. In Q2, operating profit margin dropped by 3.3 percentage points from Q1 to 3.6% due to temporary costs and delivery delays. However, Eugene Investment & Securities estimated the Q3 operating profit margin to improve substantially to 10.8%.

(Provided by Eugene Investment & Securities)

Park Jong-sun, a researcher at Eugene Investment & Securities, explained, “Sales to customers delayed due to the COVID-19 situation are now being reflected, and as sales in each business division increase, profitability is improving. Although steel and aluminum prices are rising, the company secures cost competitiveness by purchasing raw materials in bulk and stockpiling them while also producing intermediate materials directly.”

Next year, balanced growth is expected across all divisions. In particular, sales of other parts such as household goods, electric vehicles, automobiles, and robots are expected to show the highest growth. Additionally, sales of energy storage system (ESS) parts are expected to grow as new customers increase. The semiconductor equipment division, which previously showed results mainly from the Gumi plant, is now generating sales in earnest at the new Hwaseong plant. Due to the global expansion of 5G investment, customer diversification including Fujitsu and Ericsson is also an anticipated factor.

Accordingly, Eugene Investment & Securities maintained its investment opinion of “Buy” on Seojin System with a target price of 52,000 KRW. The closing price on the previous day was 37,300 KRW.

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