[Click e-Stock] "THN, Undervalued Appeal... Earnings Improvement Accelerates"

On March 18, Hana Securities assessed THN, a manufacturer of automotive wiring harnesses, stating, "The stock price is excessively low compared to the company's improving performance." The firm did not provide a specific target price or investment opinion.

On the same day, Song Sunjae, a researcher at Hana Securities, said, "THN's current stock price (closing price of 9,040 won as of the previous day) is significantly lower than those of its industry peers. Based on 2025 earnings, the price-to-earnings ratio (PER) is only in the mid-2x range," and made the above assessment.

Last year, THN's sales and operating profit jumped 52% and 126%, respectively, from 2024, reaching 989.1 billion won and 70 billion won, showing a significant improvement. The operating margin also rose by 2.3 percentage points to 7.1%.

The strong performance was primarily driven by the launch of new high-priced vehicle models. Researcher Song explained, "The launch of the new Palisade and Palisade Hybrid (HEV) models, which are THN's main supply, led to increased volume," adding, "SUVs and eco-friendly models use high-spec wiring harnesses, which further improved profitability."

External growth resulting from the acquisition of a related company's business was another key factor. In May of last year, THN acquired the wiring harness division of its affiliate JSN for 9.8 billion won. This added approximately 30 billion won in quarterly sales and delivered economies of scale, such as enhanced bargaining power for raw material procurement and reduced common expenses.

Growth is expected to continue this year as well. Song said, "Full-year results from last year's new models will be reflected, and new vehicle effects are anticipated from the launch of models such as the new Seltos and the new HB20 in Brazil," adding, "Sales are projected to increase by 7% year-on-year to 1.06 trillion won, while operating profit is forecast to rise by 6% to 74.1 billion won."

Song pointed out, "High dependence on certain models and sensitivity to copper prices are factors contributing to the stock's discount, but even accounting for these, the current valuation is excessively low." He added, "The price-to-book ratio (PBR) is around 0.7x, and the dividend per share is expected to be 120 won."

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