[Click e-Stock] "FineMT Begins Benefiting from Samsung and North American Foldables... Performance Improvement Accelerates"

FineMT, a manufacturer of foldable smartphone components, is projected to see a significant improvement in its performance during the second half of this year, buoyed by the success of Samsung Electronics’ Galaxy Z Fold8. There is particular interest in whether the company's revenue structure, which has traditionally been concentrated on specific clients and periods, could be diversified as North American smartphone makers are set to enter the foldable market.

On August 11, Lee Jeyoon, an analyst at Leading Investment & Securities, commented on FineMT, stating, "The long-awaited moment for anticipated results has arrived," and pointed to the growth potential stemming from the expanding foldable market.

FineMT operates in the IT components industry and primarily manufactures backplates (hinges) that support the lower panel of foldable smartphones as core products. Because smartphones are the main downstream industry, the company typically experiences its off-season in the first quarter and a peak season in the second quarter due to seasonality.

However, this year, with the foldable smartphone market expanding and new clients entering the scene, there is growing analysis that the peak season could extend through the second half of the year.

As of the first quarter of this year, mobile components accounted for the highest share of FineMT's sales, making up 75% domestically and internationally combined. Die-casting components represented 4%, while mobile and automotive parts accounted for 21%.

The most notable factor is the strong sales performance of the Galaxy Z Fold8. According to market research firm Counterpoint, global preorders for the Galaxy Z8 series increased by 30% compared to its predecessor. First-year shipments are also expected to rise by more than 10% compared to the Galaxy Z7 and by more than 70% versus the Z6.

Robust demand has been confirmed in South Korea as well, with domestic preorders for the Galaxy Z8 series exceeding 1.44 million units. Among these, the Galaxy Z Fold8, which features FineMT’s key external hinge component, is estimated to account for about 70% of the volume.

The analyst explained, "Because FineMT supplies external hinges, it is even more important to track shipments of fold-type smartphones than the total shipments of all foldable devices."

He further emphasized, "This year, FineMT is likely to directly benefit from the popularity of the Galaxy Z Fold8," adding, "Order volumes have reportedly continued to increase even after the Unpacked event, so from the second quarter through the third quarter, we could see significant improvements in results."

The entry of North American clients into the foldable market in the second half is also expected to serve as a new growth engine. North American smartphone manufacturers have already indicated plans to launch foldable smartphones later this year, with some industry sources pointing to a possible launch in September.

For FineMT, the emergence of new clients may not only expand its revenue base but also provide an opportunity to mitigate its traditional seasonal profit fluctuations.

Currently, FineMT’s performance tends to concentrate in the second quarter, which coincides with domestic clients' foldable product launches. If North American clients release foldable smartphones starting from the third quarter, the product launch schedule may shift so that new domestic models are followed by North American launches in succession.

The analyst stated, "We expect North American clients' foldable devices to launch in September, with new foldable models likely being introduced every second half of the year going forward."

Thus, the flow of FineMT’s performance could fundamentally change. Every year, the product launch by domestic clients in the second quarter may be followed by North American launches in the third quarter, potentially leading to strong results continuing through the fourth quarter depending on sales performance.

The analyst added, "There is a strong likelihood that FineMT will break away from performance concentrated in the peak season and a revenue structure reliant on a single major client," noting, "From a fundamental perspective, this can be seen as a clear step up for the company." He also analyzed that this year could mark the starting point for this transformation, creating further upside potential for its stock price.

The analyst evaluated, "With this starting point being formed this year, the current share price is considered to be in its most undervalued range."

FineMT is expected to further benefit from the growth of the foldable market if it expands its customer base from primarily domestic clients to include North American partners. The strong sales of the Galaxy Z Fold8 are seen as a short-term catalyst, while North American clients' market entry could offer longer-term revenue stability, together providing dual growth drivers for the company.

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