BNK Investment Securities analyzed on the 17th that Soluem's performance in the fourth quarter of this year was weak, but that performance will recover next year as new orders for electronic shelf labels (ESL) increase. The investment opinion and target stock price were maintained at buy and 29,000 won, respectively. The previous day's closing price was 21,300 won.
According to BNK Investment Securities, Soluem's ESL order backlog is expected to reach 2.1 trillion won by the end of this year, marking an all-time high. Research Institute Lee Min-hee noted, “New orders with major retailers in Europe, which have been in the bidding process, have been successfully secured consecutively,” adding, “There are several ongoing new orders with major retailers in the United States and Europe next year, so the growth trend is expected to continue.”
According to BNK Investment Securities, Soluem's operating profit in the fourth quarter is expected to decrease by 36% compared to the previous year, amounting to 9.5 billion won. This research institute analyzed that the reason for Soluem's poor performance is that “ESL sales in the fourth quarter are expected to be significantly lower than expected at 11.33 billion won, down 18% from the previous quarter,” and that “end-of-year expense factors, such as performance bonuses, were more than anticipated.”
This research institute stated, however, “I believe the bottom of the market has passed,” and “the stock price will gradually rise step by step.”