[Click eStock] "Interplex Shows Clear Earnings Growth... Target Price Up 29%"

[Asia Economy Reporter Park Jihwan] Daishin Securities forecasted on the 18th that Interflex's annual sales last year increased by nearly 40% compared to the previous year, indicating the beginning of substantial growth in both scale and performance. The investment opinion 'Buy' was maintained, and the target price was raised by 29.4% from the previous 17,000 KRW to 22,000 KRW.

Park Kangho, a researcher at Daishin Securities, stated, "Last year's Q4 consolidated operating profit is expected to be 12.8 billion KRW, exceeding the previous estimate of 9.9 billion KRW," adding, "This represents a turnaround to profitability compared to the previous year and a 29.5% increase compared to the previous quarter, marking an escape from operating losses over the past three years (2018-2020) with an expected annual operating profit of 3.4 billion KRW." In particular, last year's annual sales reached 448.4 billion KRW, a 38.5% increase from the previous year, indicating the realization of substantial growth in both scale and performance.

This year's performance is expected to benefit significantly from increased sales and strategic changes of Samsung Electronics' premium smartphones (Galaxy S22 Ultra, Galaxy Z Fold4). Researcher Park Kangho said, "The S Pen is commonly applied to premium smartphones," adding, "The integration of the S Pen as a standard feature is considered a differentiation strategy by Samsung Electronics."

Interflex's sales and operating profit are expected to increase by 40.1% (628 billion KRW) and 1119% (41.3 billion KRW) respectively in 2022. In 2023, growth is expected to continue with increases of 23.1% (772.9 billion KRW) and 41.5% (58.4 billion KRW). Samsung Electronics' foldable Galaxy Z Fold sales are projected to grow significantly from 800,000 units in 2020 to 2.9 million units in 2021, 5.1 million units in 2022, and 8.2 million units in 2023. Researcher Park said, "The sales increase is expected to translate into higher sales and operating profits for Interflex, which exclusively supplies digitizers."

Investment strategies considering the possibility of further upward revisions in operating profit estimates for 2022-2023 are advised at this point. Given the current low utilization rate (60% average in 2021) and minimal additional capital investment plans, fixed cost burdens are expected to decrease with sales expansion. Researcher Park said, "With production focused on a single product (digitizer), yield and mix improvements are expected to be maximized, which is likely to lead to an expansion of operating profit margins."

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