[Click e-Stock] "Duksan Neolux, Focus on OLED Cycle and Subsidiary Value... Target Price Maintained"

On the 12th, Kiwoom Securities maintained its "Buy" investment opinion and target price of 63,000 won for Duksan Neolux, saying that "attention should be paid to the first OLED (organic light-emitting diode) cycle in five years and the value of its subsidiaries."

On this day, So Won Kim, an analyst at Kiwoom Securities, said, "New mass production of OLED panels for the client's foldable iPhone, iPad mini, and MacBook Pro is expected this year, and this is projected to directly translate into benefits for Duksan Neolux."

She added, "The current share price only reflects uncertainties arising from a slowdown in downstream demand and rising memory prices," and said, "Even if we assume negative growth in the smartphone market this year, solid growth is expected, driven by the launch of the foldable iPhone and the increasing penetration of IT (information technology) OLEDs."

In the fourth quarter of last year, revenue came in at 127.1 billion won, up 144% year-on-year. Operating profit was 23.1 billion won, an 18% increase, but it fell short of Kiwoom Securities' estimate of 30.5 billion won and the market consensus of 30.3 billion won. Analyst Kim explained, "This was due to the one-off recognition of year-end performance bonuses and amortization of intangible assets following the acquisition of Hyundai Heavy Industries Turbomachinery," adding, "Excluding these factors, results would have slightly exceeded market expectations."

On a standalone basis, revenue was 65.1 billion won, up 25% year-on-year. Operating profit was 19.4 billion won, down 1%, and the operating margin stood at 29.8%. Analyst Kim said, "Along with solid iPhone demand, material supply for the Galaxy S26 series has begun in earnest," adding, "For the Galaxy S26 Ultra model, a black pixel define layer (PDL) is expected to be newly adopted. Going forward, adoption is also expected to accelerate not only for foldables but also for conventional bar-type smartphones."

She also highlighted the subsidiary Hyundai Heavy Industries Turbomachinery. This year's revenue is expected to be 198 billion won, up 25% year-on-year, and operating profit is projected to be 24 billion won, up 67%. Analyst Kim said, "A steep profit growth trajectory is expected, supported by increased supply of compressors for gas turbines related to data centers and pumps for overseas nuclear power plants," adding, "High growth is anticipated on the back of expanding orders centered on overseas nuclear power plants. Applying a 2026E PER (price-to-earnings ratio) of 27 times for the comparable group, the subsidiary alone is estimated to be worth over 500 billion won."

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