Meritz Securities on the 11th said LEENO Industrial is maintaining solid earnings growth on rising demand for research and development (R&D) sockets and mobile mass-production sockets. It kept its investment rating at "Buy" and raised its target price 16.7% to 140,000 won from 120,000 won. On the previous trading day, LEENO Industrial closed at 112,600 won.
LEENO Industrial posted first-quarter revenue of 99.8 billion won and operating profit of 47.3 billion won this year. Compared with the first quarter of last year, revenue rose 27% and operating profit increased 35%.
The increase was driven by higher shipments of application processors (AP) from a North American mobile fabless customer this year. With growth across all segments, gains in test socket results were particularly notable.
By product, revenue from LEENO PINs is estimated at 22.9 billion won, up 13% from a year earlier. IC TEST SOCKET came to 65.3 billion won, up 36%, and medical device components reached 10.6 billion won, up 15%.
Meritz Securities forecast LEENO Industrial's revenue at 445.8 billion won and operating profit at 215.7 billion won this year, up 20% and 22%, respectively, from last year. It cited expectations that the pin count of test sockets and the average selling price (ASP) of sockets will increase as chip integration density rises with the application of wafer level multi chip module (WMCM).
Kim Dong-Kwan, an analyst at Meritz Securities, said, "More than 60% of LEENO Industrial's revenue comes from semiconductors for smartphones, such as APs and modem chips," and added, "Since the start of the year, the annual smartphone demand outlook has been revised down due to rising memory prices, but ASP is expected to rise on WMCM adoption in flagship APs in the second half of this year, and demand is likely to be strong for large-size sockets such as for HPC and AI."
Kim added, "Another reason to keep expectations for LEENO Industrial's results positive is that smartphone demand at a major North American set customer is solid compared with concerns."