Independent research firm ValueFinder said on the 21st that UIL has positive momentum (upside potential) on the back of undervaluation, ample cash-like assets, stable core business profitability, and strengthened shareholder-return policies. It did not present a target price or investment opinion. The previous trading day's closing price for UIL was 3,420 won.
UIL is a specialized electronic components company founded in 1982 and listed on the KOSDAQ market in 2001. As of the third quarter last year, revenue mix was composed of 86% mobile phone components, 10% e-cigarette components, and 4% non-product revenue.
On the 21st, the company decided to buy back 3.5 billion won worth of its own shares in line with the government's push to strengthen shareholder returns. Lee Chung-heon, a ValueFinder analyst, said, "There is a high possibility of future cancellation, which will translate into a stock stabilization effect," adding, "Maintaining a high dividend with a dividend yield of 7.9% and continuing quarterly dividends last year, UIL's shareholder-return stance, aligned with government policy direction, is likely to contribute to a re-rating of corporate value going forward."
The company currently manufactures and supplies SIM trays, a key smartphone component. ValueFinder said UIL is also set to supply SIM trays for the initial batch of this year's new smartphone model from S.
The analyst said, "UIL has been reliably supplying major components such as SIM trays and side keys from the Galaxy S3 through the latest models," adding, "If the launch of new flagship models and the smartphone replacement cycle become visible, the company's product revenue will show a high correlation with growth in the downstream market."
ValueFinder expected UIL's fourth-quarter results last year to be at a similar level to the previous quarter. It estimated full-year revenue last year at 410.3 billion won, down 3.4% from a year earlier, and operating profit at 25.4 billion won, up 20.4%.
The analyst said, "Considering the undervaluation at a price-earnings ratio (PER) of 5.6 times, the virtually debt-free management level, and core business profitability, a re-rating of corporate value is possible as the Korea discount eases going forward."