[Click e-Stock] "Iljin Electric to Sustain Structural Boom... Target Price Raised"

On December 10, Shinhan Investment Corp. analyzed that Iljin Electric is expected to continue experiencing a structural boom. The company maintained its "Buy" investment rating and raised its target price to 70,000 won.

Iljin Electric recorded sales of 450.2 billion won in the third quarter, up 35.8% year-on-year. During the same period, operating profit reached 35.3 billion won, an increase of 140.8%. Heo Seonggyu, a researcher at Shinhan Investment Corp., stated, "The transformer division achieved an operating margin of 23.9% thanks to the full-scale launch of high-margin projects in the Americas, while the cable division reached 7.6% due to an increased proportion of ultra-high voltage products." He added, "In the fourth quarter, the company is expected to strengthen its earnings momentum as it enters the seasonal peak period and begins to benefit from the expansion of its second plant in Hongseong."

He also projected continued strong performance in both the cable and transformer divisions. He explained, "Cumulative sales in the cable division for the third quarter reached 1.1072 trillion won, with ultra-high voltage cable sales surging 43.7% year-on-year, offsetting a decrease in low-margin copper wire sales. The order backlog stood at 580 million dollars, up 2.6% from 560 million dollars at the end of last year."

He further emphasized, "Cumulative sales in the heavy electrical equipment division for the third quarter reached 320.5 billion won, an increase of 81.1% year-on-year, and the order backlog rose 10.9% to 1.23 billion dollars compared to the end of last year. With the completion of the plant expansion, annual production capacity (CAPA) is expected to increase from 300 billion won last year to 433 billion won next year."