[Click eStock] Iljin Materials, Target Price Raised Despite Missing Earnings Expectations

[Asia Economy Reporter Hwang Junho] NH Investment & Securities on the 28th raised the target price of Iljin Materials to 150,000 KRW, an increase of about 25%. Although the first quarter performance this year was below expectations, there is potential for performance improvement starting from the second quarter due to the operation of new factories.

NH Investment & Securities expects Iljin Materials' sales in the first quarter of this year to increase by 36% year-on-year to 187.7 billion KRW. Operating profit is also expected to rise by 39% year-on-year to 19 billion KRW. However, these figures are 11% and 13% below market expectations, respectively.

It is forecasted that the delayed operation of the Malaysia 3rd and 4th factories (each with a capacity of 10,000 tons), completed in the fourth quarter of last year, will result in lower-than-expected performance. Each factory was originally expected to start operating from the first quarter of this year, but the operation was delayed by about one quarter. Accordingly, it is anticipated that from the third quarter of this year, performance could exceed market expectations by 8-9%.

Researcher Juminwoo of NH Investment & Securities analyzed, "In terms of performance, the upside for the second half of the year will be determined by the ramp-up speed of the 3rd and 4th factories in the second quarter of this year," adding, "During the same period, new investment plans in Europe and the United States are expected to be finalized, and local production in Europe and the United States is expected to begin from 2024."

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