"Duk San Neolux, Solid Core Business and Subsidiary Growth... Time to Increase Holdings" [Click e-Stock]

Buy Rating Maintained, Target Price Set at 70,000 Won
"Strong Results Continue to Exceed Market Expectations"

According to analysts in the securities industry, Duk San Neolux is increasing its investment appeal, backed by solid shipments of organic light-emitting diode (OLED) materials and the growth momentum of its subsidiaries.

On June 11, iM Securities reported that analyst Jeong Wonseok maintained a "Buy" rating and a target price of 70,000 won for Duk San Neolux, stating, "The current share price does not fully reflect the company's mid- to long-term growth potential in its core business or the value of its subsidiaries." The previous day's closing price was 34,400 won.

Analyst Jeong projected that Duk San Neolux's consolidated earnings for the second quarter of this year would exceed market expectations, with sales of 97.7 billion won and operating profit of 19.1 billion won. Compared to the same period last year, sales are expected to increase by 21% and operating profit by 86%, respectively.

Shipments of OLED materials have remained solid, alleviating previous concerns. Analyst Jeong explained, "This is because the main customer, Samsung Display, is maintaining a high utilization rate." He added, "Although major Chinese smartphone manufacturers have significantly lowered their shipment targets for this year due to a recent shortage of memory semiconductors, Samsung Electronics and Apple are maintaining robust sales momentum, supported by stable component supply."

This trend is highly likely to continue into the second half of the year. With the launch of the Galaxy Z Fold 8 scheduled for next month and the release of the iPhone 18 and new foldable products coming up in September, shipments of OLED materials are entering full swing.

The growth trend in the performance of subsidiaries is also positive. For Hyundai Heavy Industries Turbo Machinery, shipments of some orders that were delayed in the first quarter due to logistics disruptions are expected to normalize, leading to increased sales recognition.

Analyst Jeong noted, "New orders are steadily increasing, especially for nuclear pumps and gas compressors." "In addition, with the decision last month to acquire a 100% stake in SNS Valve, the top domestic manufacturer of cryogenic valves for LNG and shipbuilding, this will likely be reflected in consolidated results as early as the second half of the year, accelerating the growth trajectory of the subsidiary segment."

Regarding the recent share price decline, he assessed it as "an excessive correction unrelated to the company's fundamentals." He explained that as market liquidity has concentrated on KOSPI and large-cap stocks, investor sentiment for KOSDAQ small- and mid-cap stocks has generally weakened. He added, "The risk of further downside is likely to be quite limited, and I recommend an aggressive strategy to increase holdings."

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