[Click eStock] "Vitzrocell, Increasing Contribution of Defense Sector Sales... Target Price Up"

Target Price Raised by 14.3% Compared to Previous Level

Shinhan Investment Corp. raised the target price for Bitsrocell from 28,000 KRW to 32,000 KRW on the 18th, citing an increase in sales contribution from the defense sector. The investment rating was maintained as 'Buy.'

Researcher Byunghwa Lee of Shinhan Investment Corp. stated, "We have revised the 2025 earnings per share (EPS) upward by 7.1% compared to the previous estimate and increased the target price by 14.3%. This is due to the rising sales contribution from the defense sector, recovery of high profitability in high-temperature batteries, and solid North American infrastructure sales, all of which point to impeccable performance."

Bitsrocell recorded sales of 48.8 billion KRW in the third quarter of this year, an 11.1% increase year-on-year, and operating profit of 12.3 billion KRW, up 70.3%. Lee said, "Sales met our estimates, and operating profit exceeded them by 9.7%. We confirmed solid performance in key downstream industries such as North American infrastructure, crude oil, and defense."

With a significant improvement in defense sector performance, a seasonal effect is expected in the fourth quarter. Lee estimated, "Fourth-quarter sales by product are expected to be 30.6 billion KRW for bobbin, up 11.5% year-on-year; 9.8 billion KRW for high-temperature batteries, up 42.4%; 16.7 billion KRW for ampoule and thermoelectric batteries, up 149.2%; and 7.3 billion KRW for wound radio devices, up 150%. The wound product in the defense sector is benefiting from the Ministry of National Defense's radio replacement project, leading to a significant improvement in defense sector performance and a pronounced seasonal effect in the fourth quarter."

There is an expectation of stock price revaluation. Lee said, "The price-to-earnings ratio (PER) based on 2025 earnings of 9.1 times will begin to highlight investment attractiveness. The timing coincides with increased sales of key defense sector products in the fourth quarter, which is expected to drive stock price revaluation."

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