[Click eStock] YSOL, Q3 Earnings Slump..."Let's Wait for the First Half of Next Year"

[Asia Economy Reporter Park Ji-hwan] Hana Financial Investment evaluated that Wiseol, despite falling short of market expectations in its Q3 performance this year, has performance momentum worth waiting for until the first half of next year. The investment opinion 'Buy' and the target price of 16,000 KRW were maintained.

Kim Rok-ho, a researcher at Hana Financial Investment, said, "Wiseol's Q3 sales were 97.7 billion KRW, and operating profit was 2.5 billion KRW, down 7% and 75% respectively compared to the previous year," adding, "sales decreased because the smartphone shipments of client companies were lower than the same period last year due to shortages of APs and various components."

However, despite the nearly 15% decrease in smartphone shipments of client companies in Q3 compared to the same period last year, Wiseol's sales decline was considered to have held up well. This is because the per-unit mounting increased due to the expansion of 5G smartphones, and sales to Chinese clients were favorable compared to the same period last year. Particularly, the large decrease in operating profit was analyzed to be caused by continued cost burdens from next-generation filter development, rising material costs, and deterioration of product mix.

Q4 sales are expected to increase by 11% year-on-year to 92.1 billion KRW, but operating profit is forecasted to decrease by 31% to 2.3 billion KRW. Researcher Kim Rok-ho said, "smartphone shipments of client companies still face difficulties in rebounding due to shortages of various components," adding, "however, due to the base effect and increased per-unit mounting, sales are estimated to increase compared to the same period last year." He added, "Issues such as R&D for new filters and rising material costs are unlikely to be resolved in the short term, so performance is expected to remain at a level similar to the previous quarter."

The future watch points were identified as the completion of next-generation filter development and supply to client companies, as well as the success of internalizing raw materials such as ICs. Researcher Kim emphasized, "These issues are expected to be confirmed within the first half of next year," and "if successful, they are expected to contribute to performance in the second half."

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