[Click e-Stock] "KH Vatec, Reflecting Noise Related to Foldable Volume"…Target Price ↓

On the 25th, IBK Investment & Securities maintained a positive long-term growth outlook for KH Vatec but slightly lowered the target valuation due to recent noise related to foldable product volumes, reducing the target stock price from 30,000 KRW to 25,000 KRW. However, the buy rating was maintained.

KH Vatec's second-quarter sales amounted to 75.6 billion KRW, a 74.5% increase from the previous quarter. Researcher Kim Unho of IBK Investment & Securities explained, "This was due to the earlier mass production timing of new product-related parts from domestic clients compared to last year," adding, "It also represents a 40.7% increase compared to the same period last year."

He further stated, "Hinge sales tripled compared to the previous quarter, which is estimated to be more influenced by an increase in average selling price (ASP) due to product design changes rather than volume," and added, "Third-quarter sales are expected to nearly double from the second quarter to 212.4 billion KRW, which is slightly lower than previous forecasts." Despite rumors about volume, the analysis suggests that volumes through the third quarter will not be significantly affected.

KH Vatec's main products include hinges, brackets, and end plates for batteries. Currently, hinges account for the largest proportion, and this trend is expected to continue for the time being. Brackets are expanding their business area from mobile to automotive electronics, with automotive-related sales expected to be generated through a global automotive parts company by the end of the year.

Additionally, benefits related to new metal cases are anticipated. Production of metal cases using new materials and new processes, rather than CNC milling, is expected to expand from 2024. End plates are also being developed with a sales target set for 2025.

Researcher Kim stated the reason for maintaining the buy rating: "Since the second quarter, rapid performance improvements have continued," and added, "We expect that not only foldable core components but also the effects of new products will contribute to future top-line growth and profitability improvements, and the proportion of automotive electronics is also expected to gradually increase."

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