[Click eStock] "PI Advanced Materials, Target Price Lowered from 38,000 to 28,000 Won"

On the 29th, NH Investment & Securities lowered its earnings forecast for PI Advanced Materials, considering the slowdown in smartphone sales from North American clients and intensified competition with companies in the Greater China region, and downgraded the target stock price from 38,000 KRW to 28,000 KRW. However, it maintained a buy rating, taking into account the potential improvement in demand from upstream industries, sales diversification through electric vehicles, and synergy with the parent company.

Recently, the slowdown in sales and inventory adjustments by North American smartphone companies caused a sharper-than-expected decline in performance. Additionally, the increased demand for thick high-refractive-index films intensified competition with Greater China companies, which was also judged to have negatively impacted earnings.

NH Investment & Securities lowered PI Advanced Materials' 2024 operating profit forecast by 25% compared to the previous estimate, considering weak demand from clients and intensified competition with Greater China companies. It expects a full-scale earnings recovery in the second half of the year, with a recovery in North American client volumes and improvement in Chinese smartphone demand.

In the fourth quarter of last year, operating profit recorded 1.1 billion KRW, falling short of consensus. This was due to low operating rates caused by demand slowdown and one-time costs. However, in the first quarter of this year, it is expected that the impact of inventory adjustments will ease and costs will decrease, leading to profit improvement. In the mid to long term, through synergy with the parent company, Arkema, sales channels are expected to diversify into EV battery insulation tapes, automotive electronics, aerospace, and others, reducing dependence on smartphones.

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