[Click eStock] "Enox Advanced Materials, Growth Momentum Phase... Relating Required... Target Price Up"
Shinhan Investment Corp. analyzed on the 23rd that Inox Advanced Materials requires a stock price revaluation as profitability improvement this year and product line expansion next year are becoming visible. The investment opinion was maintained as 'Buy,' and the target price was raised to 48,000 KRW.
Namgung Hyun, a researcher at Shinhan Investment Corp., explained, "We judge that it is currently undervalued as it is a phase where profitability improvement in 2024 and product line expansion in 2025 are becoming visible," adding, "With the expansion of artificial intelligence (AI) functions, there is growing expectation for recovery in front-end set demand, necessitating a stock price revaluation."
Shinhan Investment Corp. forecasted that Inox Advanced Materials will record sales of 115.9 billion KRW and operating profit of 25.9 billion KRW in the second quarter of this year, increasing by 13% and 65% respectively compared to the previous quarter. Sales and operating profit for this year are expected to improve by 17% and 103% year-on-year to 454.2 billion KRW and 85.1 billion KRW, respectively.
He stated, "The background of performance growth includes strong smartphone sales, increased supply of materials to the Greater China region, and recovery in demand for large organic light-emitting diode (OLED) panels. Additionally, profitability improvement is expected due to mix improvement centered on high-margin products, efficiency gains from quality improvements, and increased sales to China."
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Along with this, expansion of the sales portfolio is also an anticipated factor. He emphasized, "Following the lithium hydroxide business, recent efforts to diversify the portfolio are confirmed by focusing on expanding semiconductor and display material businesses," adding, "Results are expected in optical adhesive films used in displays, optical films used in automotive displays, thermal runaway prevention materials used in electric vehicles, and functional materials used in semiconductor post-processing."
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