[Click eStock] "Inox Advanced Materials Expected to Deliver Strong Earnings Despite Off-Season"

4Q Operating Profit Expected at 30.4 Billion KRW... 152% YoY Increase
Benefit from OLED Demand Growth and Strong iPhone Sales

[Asia Economy Reporter Minwoo Lee] InnoX Advanced Materials is expected to deliver strong earnings that exceed market expectations even in the off-season fourth quarter of last year. This is attributed to the combined effect of the customer's new production line operation and steady iPhone demand.

On the 7th, Kiwoom Securities maintained its 'Buy' rating on InnoX Advanced Materials and raised the target price by 24.1% to 67,000 KRW. The closing price the previous day was 44,200 KRW.

Kiwoom Securities forecasted that InnoX Advanced Materials would record consolidated sales of 134.4 billion KRW and operating profit of 30.4 billion KRW in the fourth quarter of last year. These figures represent a sharp increase of 57% and 152%, respectively, compared to the same period last year. They also significantly surpassed the market consensus of 133.6 billion KRW in sales and 27.5 billion KRW in operating profit. Typically, the fourth quarter sees a significant decline in performance compared to the third quarter peak season, but last year's fourth-quarter operating profit is expected not only to maintain the previous quarter's level but also to set a record high with an operating margin of 22.6%, following 21.9% in the third quarter.

Researcher Sowon Kim of Kiwoom Securities explained, "The innoled division will lead strong earnings driven by the customer's new WOLED production line operation and steady iPhone demand. The Smartflex division is also expected to achieve better-than-expected results, supported by strong sales of foldable smartphones."

This positive trend is expected to continue this year as well. Kiwoom Securities projected that InnoX Advanced Materials will achieve sales of 558.5 billion KRW and operating profit of 116.1 billion KRW this year, increasing by 16% and 22%, respectively, compared to the previous year, continuing its record-breaking performance streak.

While the InnoFlex division, which has relatively weakened competitiveness, is expected to maintain last year's performance level, growth is anticipated to continue mainly in the InnoOLED and Smartflex divisions. The InnoOLED division is expected to grow not only by benefiting from the customer's increased OLED panel shipments but also by expanding its new customer base. The Smartflex division is expected to benefit from Samsung Electronics' increased shipments of foldable smartphones and the diversification of supply materials.

Researcher Kim emphasized, "Currently, the stock price is at a price-to-earnings ratio of 9 times based on 2022, making it the most undervalued OLED materials company with attractive potential. A revaluation of InnoX Advanced Materials' corporate value is necessary as it focuses on competitive divisions to achieve rapid growth."

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