[Click e-Stock] "Samyoung Electronics Target Price Raised... Net Cash Exceeds Market Cap"

Samyoung Electronics Target Price Raised to 17,000 Won

On March 18, LS Securities raised its target price for Samyoung Electronics to 17,000 won, maintaining its "Buy" rating, citing the company's substantial net cash holdings and new business initiatives as positive factors.

Jung Hongsik, an analyst at LS Securities, explained the rationale for the target price revision by stating, "Interest income is being reflected every year based on Samyoung Electronics' large net cash reserves. In addition, due to a base effect from a one-off non-operating loss of approximately 10 billion won that was recognized last year when operations at Pocheon Plant 1, a raw material production facility, were halted, net profit is expected to see a significant increase this year."

The analyst also highlighted the attractiveness of Samyoung Electronics' dividend. The current dividend per share (DPS) is 300 won, which is equivalent to 42.3% of the average payout ratio from 2022 to 2024. In particular, due to the one-off non-operating loss last year, the payout ratio was set even higher, thus meeting the requirements for separate taxation.

LS Securities projected that the DPS would continue to be maintained based on stable cash flows going forward. As of the end of last year, Samyoung Electronics' net cash stood at 313.5 billion won, which exceeds the company's market capitalization of 270 billion won.

The new business initiative announced via regulatory filing the previous day was also viewed positively. Samyoung Electronics has decided to establish an electronic components company in partnership with Abiko Electronics, leveraging the technological expertise of its parent company, Nippon Chemi-Con. The company plans to produce Nippon Chemi-Con's products such as MLCCs and inductors, and manufacture them at its plant in Vietnam. According to the disclosure, the company is targeting sales of 35 billion won in 2028.

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