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PI Advanced Material Jincheon Factory. (Photo= PI Advanced Material Homepage) |
[Alpha Biz= Reporter Kim Sangjin] On the 16th, BNK Investment & Securities upgraded its investment opinion on PI Advanced Materials (178920) from "Hold" to "Buy" and raised its target price by 22.7%, from KRW 22,000 to KRW 27,000, citing that the stock is at its bottom and now presents a good entry point.
BNK Investment & Securities expects the company’s Q4 revenue to be KRW 55.8 billion, down 21% from the previous quarter, and operating profit to be KRW 4.9 billion, a 59% decrease from the same period. Both figures are expected to fall short of market consensus by 4% and 14%, respectively.
The company attributes the declines primarily to the effects of inventory adjustments in the mobile supply chain, forecasting a decrease in revenue from flexible printed circuit boards (FPCBs) by 8% to KRW 26.2 billion, and a 40% drop in heat dissipation sheet sales to KRW 16 billion. Advanced industrial sales are also expected to drop 12% to KRW 13.6 billion, driven by sluggish demand for secondary batteries, resulting in an estimated operating profit margin of 8.8%, a decline of 8.3 percentage points from the previous quarter.
However, BNK Investment & Securities believes that inventory adjustments for smartphone OEMs are nearing completion, and along with economic stimulus, smartphone demand from China is expected to recover first. They noted that inventory in the supply chain for heat dissipation film has been largely depleted, and urgent orders (Russia orders) are appearing during the off-season toward the end of the year.
For next year, BNK Investment & Securities forecasts a 14% growth in total revenue for PI Advanced Materials. They expect heat dissipation sheets to grow by 18%, and FPCBs to increase by 13%, driven by ultra-thin sales for new slim smartphone models from North American clients, along with an average selling price (ASP) rise. Advanced industrial sales are expected to grow by 10%, led by QFN tape sales to Chinese semiconductor customers, which could replace Japanese products due to better cost performance.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
