[Click eStock] "Newflex, Reflecting Smartphone Shipment Slowdown"

Meritz Securities on the 27th downgraded its earnings estimates for Newflex due to a slowdown in smartphone shipments from its client companies.

Yang Seung-su, a researcher at Meritz Securities, explained, "We are lowering Newflex's sales and operating profit estimates for this year by 7.9% and 20.7%, respectively, compared to previous estimates," adding, "This reflects the slowdown in demand in the smartphone market."

He added, "This is because the expected smartphone shipment volume of the main client company for this year was revised down from 240 million units to 220 million units, a decrease of 8.3%."

Researcher Yang emphasized, "The production volume of Quest 3S, which Newflex is responsible for manufacturing as a solvent vendor, will maintain the previously planned level of 10 million units, reflecting the possibility of a launch in the Chinese market next year," and added, "Although the smartphone market is sluggish, the client company's position in the extended reality (XR) market is expanding."

He analyzed, "After the release of Quest 3 and Vision Pro, the market's interest is shifting from virtual reality (VR) to mixed reality (MR)," and explained, "Unlike VR, MR has high applicability in B2B markets such as healthcare, education, medical, and defense." Furthermore, he said, "MR device shipments were sluggish over the past year due to price resistance concerns," and added, "The Quest 3S, which was unveiled at that time, was launched at a relatively lower price."

Researcher Yang predicted, "Unlike previous models, it has a high potential for success across both B2C and B2B markets."

He maintained a "Buy" investment opinion on Newflex and lowered the target price by 13.0% to 10,000 KRW.

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