[Click eStock] "BH, High Long-Term Earnings Visibility... Target Price Up 14%"

[Asia Economy Reporter Kwon Jae-hee] Meritz Securities has maintained a 'Buy' rating on BH and raised the target price by 14% from the previous 43,000 KRW to 49,000 KRW.

BH's sales for the third quarter of this year are expected to reach 439.6 billion KRW, and operating profit is projected at 58.8 billion KRW, representing increases of 31.7% and 34.6% year-on-year, respectively. These figures exceed consensus estimates by 4.5% and 8.9%.

Researcher Yang Seung-soo of Meritz Securities analyzed, "Although BH's earnings visibility is already high due to the withdrawal of major competitors last year, further upward revisions are necessary."

The basis for this is the simultaneous expansion of market share among major customers for iPhone and BH's increasing share within these customers. In particular, BH is expanding supply centered on the highly profitable Pro and Pro Max models in this cycle, which enhances earnings visibility. Additionally, initial production volume for the iPhone 14 is higher than the previous model, and the exchange rate environment is favorable.

Accordingly, BH's sales for this year are expected to reach 1.623 trillion KRW, and operating profit 164.8 billion KRW, representing increases of 56.5% and 131.8% year-on-year, respectively. Sales to North American customers are expected to grow significantly due to gradual market share gains within the Pro and Pro Max models. Despite concerns, sales to domestic customers are expected to be defended through new product supply for foldable phones. Sales of FPCB for batteries, which will be BH's new growth engine, are projected to reach 42.6 billion KRW this year, with high growth expected through full-scale supply to the three major battery companies.

Researcher Yang stated, "BH's FPCB is expanding its applications to automotive electronics, tablets, and laptops, and from the fourth quarter this year, the wireless charging business for vehicle phones acquired from LG Electronics is also expected to contribute to earnings," adding, "We judge that stable earnings growth visibility is high in the mid to long term and present BH as the top pick within the sector."

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