[Click eStock] "Novarex, New Factory Effect... Expecting External Growth"

[Asia Economy Reporter Lee Jung-yoon] Daishin Securities maintained a buy rating and a target price of 56,000 KRW for Novarex on the 21st, expecting external growth due to the effect of factory expansion.

Novarex's sales in the fourth quarter of last year reached 79.6 billion KRW, up 44.5% year-on-year, and operating profit rose 30.2% to 9.4 billion KRW, marking the highest quarterly performance. The strong fourth-quarter results were analyzed to be due to increased operating rates from expanded production capacity (CAPA), external growth, and improved cost ratios.

Novarex secured more than double the production capacity compared to before through the expansion of its Osong factory in Cheongju, Chungbuk this year, and continuous growth in orders is expected in the first half of this year.

Han Kyung-rae, a researcher at Daishin Securities, said, "Considering the improved yield from the fourth quarter of last year based on the high production automation rate of the new factory, a gradual improvement in operating profit margin is expected this year," adding, "With the new factory operation entering a phase of simultaneous improvement in scale and profit, an upward trend in stock price is expected in 2022."

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