[Click eStock] "KH Vatec, Lower-than-Expected Performance Forecast for Second Half"…Target Price ↓

NH Investment & Securities lowered its earnings forecast for KH Vatec on the 14th, considering the weakening mix due to the increased proportion of the Flip series, and also cut the target stock price from 27,000 KRW to 23,000 KRW. However, the buy rating was maintained due to potential factors for mid- to long-term growth expansion.

Lee Kyu-ha, a researcher at NH Investment & Securities, said, "The response to the recently launched foldable smartphone for domestic customers is favorable," adding, "However, it is difficult to exceed the previous annual forecast of 13 million units, and the increasing proportion of the Flip series is also negative for earnings."

He further stated, "We are lowering the foldable smartphone shipment forecasts for this year and 2024 by 9.4% and 10%, respectively, and also lowering the operating profit forecasts by 10% and 13.1%, respectively."

KH Vatec's operating profit in the second quarter increased by 61.5% year-on-year to 6 billion KRW, slightly exceeding NH Investment & Securities' estimates. This was attributed to favorable exchange rates and foldable smartphone shipments occurring faster than expected.

The researcher added, "In the second half of the year, due to macroeconomic weakness and the increased proportion of the Flip series, we expect the existing earnings forecast to be slightly missed," and "In the mid- to long-term, the expansion of new foldable devices including tablets and diversification of customers to Chinese market companies are expected to be factors for stock price increase and valuation expansion."

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