[Click eStock] "Lutronic, 4Q Higher Than Expected Revenue Growth Rate... Expecting Balanced Growth"

[Asia Economy Reporter Lee Jung-yoon] Hana Financial Investment maintained a buy rating and a target price of 31,500 KRW for Lutronic on the 28th, citing higher-than-expected revenue growth in the fourth quarter of last year and expectations for steady growth this year.

Lutronic's revenue in the fourth quarter of last year rose 35.1% year-on-year to 54.9 billion KRW, and operating profit increased 23.2% to 8.9 billion KRW. Hana Financial Investment analyzed that Lutronic's record quarterly revenue was driven by strong sales of premium products.

However, Lutronic's operating profit margin in the fourth quarter was 16.2%, lower than market expectations. Kim Doo-hyun, a researcher at Hana Financial Investment, explained, "The reason for the lower operating profit margin is due to the burden of raw material and logistics costs caused by supply chain issues, increased marketing expenses compared to reopening, proactive hiring for production and sales expansion, and conservative allowance for doubtful accounts." He added, "Excluding one-time costs such as fourth-quarter bonuses and allowance for doubtful accounts, the operating profit margin stands at a solid 22%."

Researcher Kim projected this year's revenue to increase 28.4% year-on-year to 223 billion KRW and operating profit to rise 59.4% to 47.5 billion KRW. The revenue forecast was revised upward by 12.1% from the previous 198.8 billion KRW. Kim stated, "The basis for the upward revision is that Lutronic has grown into a company that can expect revenue of 40 to 50 billion KRW even in the off-seasons of the first and third quarters due to increased demand in the US and European markets," adding, "Since the second half of last year, the company has proactively increased production and sales personnel, and considering the 3 to 6 months training period, external growth is expected to continue this year."

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