[Click eStock] Interflex, Q2 Low Point 'Target Price ↓'... Improvement in Q3 and Q4

[Asia Economy Reporter Lee Seon-ae] Daishin Securities announced on the 24th that it maintains a buy rating on Interflex but lowers the target price to 22,100 KRW. This reflects a slowdown in sales in the second quarter. The target price was calculated by applying this year's earnings per share and a target price-to-earnings ratio (PER) of 13.5 times. It is expected that performance will improve from the third and fourth quarters, with the second quarter results being the bottom.

Third-quarter sales and operating profit are expected to increase by 44.4% (3.0% year-on-year) and 60.8% (11.5%) respectively from the previous quarter, reaching 148.6 billion KRW and 11 billion KRW. Sales and operating profit in the second half of 2022 are also expected to increase by 4.7% and 0.5% year-on-year, respectively. The sales of Galaxy Z Fold4, launched in August 2022 (estimated 7 million units), are expected to increase digitizer (flexible PCB) sales due to a 60.9% increase compared to the previous year (Galaxy Fold3) and strong sales of the Ultra (S22). Among Samsung Electronics' smartphones, models equipped with the S Pen function are premium and are released and sold repeatedly with two models per year, leading to a performance increase in 2022 and 2023 compared to the previous year.

Samsung Electronics is focusing on expanding foldable phone sales rather than mid-to-low-end models in the second half of 2022. In particular, the proportion of the premium Galaxy Z Fold4 is increasing within foldable phones, leading to an improvement in profitability due to a rise in the overall average selling price (mix effect). The increase in foldable phones, differentiated by hardware (form factor changes), and the premium Galaxy Z Fold4 is expected to play a central role in expanding the S Pen ecosystem and increasing sales and operating profit. Kangho Park, a researcher at Daishin Securities, emphasized, "In the first half of 2022, sales of the Galaxy S22 Ultra are estimated to be about 50% of the Galaxy S22, indicating that consumers will choose high-end premium and S Pen functions," adding, "The beneficiaries of Samsung Electronics' foldable phone and S Pen ecosystem expansion are judged to be Interflex."

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