[Click eStock] "BH, Structural Growth Expected Through Acquisition of Wireless Charging Business for Vehicles"

Kiwoom Securities Report

[Asia Economy Reporter Minji Lee] Kiwoom Securities on the 28th issued a buy rating and a target price of 40,000 KRW for BH. This is because the company's profit forecasts are expected to be significantly revised upward due to growth in the existing smartphone business and the effects of acquiring new businesses.

BH's operating profit this year is expected to reach 134.8 billion KRW, a 90% increase compared to the previous year. Operating profit in 2023 is anticipated to grow by 15% to 154.8 billion KRW during the same period.

The company announced on the 25th through a public disclosure that it will acquire LG Electronics' vehicle wireless phone charging business division. The acquisition is proceeding through its subsidiary BH EVS, with a purchase price of 136.7 billion KRW. Beyond expanding the existing smartphone business, it is judged that the acquisition will enable a substantial revaluation of corporate value by strengthening the business portfolio through expansion into the automotive electronics sector.

The global vehicle wireless charging market penetration rate is expected to increase from about 15% last year to 20% this year. This market is anticipated to experience rapid growth due to an increase in the number of equipped vehicles and the number of units applied per vehicle. The vehicle wireless charging division being acquired holds the number one market share, allowing direct benefits from market growth, and due to the nature of vehicle parts orders, stable revenue recognition over a long period is possible. Oh Hyunjin, a researcher at Kiwoom Securities, explained, “The sales proportion of this division in the consolidated financial statements for 2023, when the division’s performance is fully reflected, will exceed 10%.”

This year, growth in the smartphone division is also noteworthy. Despite the seasonal off-season, strong sales of the iPhone 13 series continue in North America and China, and the supply volume to North American clients is expected to exceed market forecasts. Going forward, the market dominance of the iPhone series is expected to further expand due to the underperformance of competing flagship models and the chip performance competitiveness.

Researcher Oh Hyunjin said, “The effect of increased market share within client companies due to competitors’ withdrawal will also be fully reflected this year, and the transferred volume is exceeding previous forecasts. With the favorable business environment continuing, the smartphone division’s sales this year are expected to reach 1.2027 trillion KRW, a 37% increase compared to the previous year.”

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