Shinhan Investment Securities said on the 23rd that momentum for Black PDL (Pixel Define Layer) in the fourth quarter of this year will begin in earnest, driving earnings growth for Duksan Neolux. It raised its target price to 65,000 won from 51,000 won and maintained a buy rating. Duksan Neolux closed at 42,650 won in the previous session.
Shinhan Investment Securities projected that in the third quarter of this year, Duksan Neolux will post revenue of 103.8 billion won and operating profit of 19.1 billion won. Those figures are up 28.3% and 85.4%, respectively, from a year earlier.
It estimated that display materials revenue will fall 17% due to delayed demand from clients. However, Shinhan Investment Securities analyzed that factors such as the North American client's new product launch, the expansion of models applying the M14 material stack, and 48.1 billion won in revenue from Hyundai Heavy Industries Turbomachinery will help restore profitability to normal.
Fourth-quarter revenue is forecast at 122.1 billion won, up 17.6% from a year earlier, with operating profit seen at 32.6 billion won, up 71%. Operating profit is expected to beat the market consensus of 25.5 billion won. ▲ Reflection of delayed demand from the third quarter ▲ Visibility of Black PDL earnings growth on the back of expanded application of CoE to domestic flagship models contributed. Black PDL is a light-blocking material that prevents light interference between pixels.
Namgung Hyeon, senior researcher at Shinhan Investment Securities, said, "Although the third-quarter results are approaching, investors' attention is focused on the fourth quarter of this year and next year," and added, "Considering the earnings growth story, including the smooth progress of quality tests for display materials supplied to Greater China panel clients, the share price will rebound."