[Into the Stocks] BH Attracts Institutional and Foreign 'Love Calls' Amid Expectations for Entry into the Electric Vehicle Parts Business

Acquisition of Wireless Charging Pad Business for Vehicles
Growing Expectations for Performance with New Business Expansion
412 Billion KRW Concentrated Buying This Month

[Asia Economy Reporter Minji Lee] BH, the No.1 flexible printed circuit board (FPCB) manufacturer in Korea, is receiving strong interest from foreigners and institutional investors. This is thanks to increased performance expectations following the acquisition of the automotive wireless charging pad business.

According to the Korea Exchange on the 18th, as of the 15th, BH's stock price rose 12% this month from 24,300 KRW to 27,400 KRW. The main driving forces behind the stock price increase were institutions and foreigners. Institutions purchased BH shares worth 20.4 billion KRW, and foreigners bought shares worth 20.8 billion KRW just this month. In particular, the foreign ownership ratio increased significantly this month, expanding from a single digit of 9.8% on the 22nd of last month to 17.84% on the 15th.

The concentrated buying by foreigners and institutions is driven by expectations for the expansion of the new automotive electronics business. On the 25th of last month, the company announced that its subsidiary BH EVS would acquire LG Electronics' automotive wireless charging module business. The securities industry expects sales to increase from the second half of the year when the acquisition is completed (August 24). Annually, about 200 billion KRW in additional sales are predicted.

The automotive wireless charging market is expected to grow rapidly. As of last year, the penetration rate of wireless charging in global automobile shipments was around 15-20%. Wireless charging pads are mainly embedded in premium vehicles, and as the number of equipped vehicles and the number of pads per vehicle increase, the growth rate is expected to accelerate. According to market research firm Strategy Analytics (SA), the number of vehicles equipped with wireless charging pads is expected to grow from 15 million units in 2021 to 26 million units in 2027. Assuming an average selling price of 30 USD, the market size is projected to reach 1.7 trillion KRW by 2027.

Ko Eui-young, a researcher at Hi Investment & Securities, said, "Looking at the market share of automotive wireless charging pads, BH EVS (30%), Continental (30%), and Delphi (20%) dominate the market with three main companies," adding, "Assuming the wireless charging pad market grows at an annual rate of about 20%, the dependence on smartphone component sales, BH's core business, will gradually decrease."

Considering this, BH's estimated total sales and operating profit for this year are 1.3433 trillion KRW and 122.1 billion KRW, respectively. These figures represent upward revisions of 10% and 8% compared to the January estimates of 1.2104 trillion KRW and 112.8 billion KRW. In the past, the target stock price was suggested to be in the low 30,000 KRW range, but recently Kiwoom Securities raised it to 40,000 KRW.

Stable performance is expected in the first quarter due to strong core business. Thanks to increased supply to North American client Apple, operating profit is estimated to turn positive at 19.4 billion KRW. Park Hyung-woo, a researcher at Shinhan Investment Corp., analyzed, "Although it is a seasonal off-season, high smartphone sales demand from frontline clients and the withdrawal of the largest competitor from the rigid flexible printed circuit board (RFPCB) business are expected to increase market share," adding, "Sales of high-profit product lines likely increased."

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