Korea Investment & Securities Co. said on the 18th that ROBOTIS(108490)'s second-quarter operating profit far beat the market forecast (consensus) on a surge in demand for robot actuators. It maintained a "buy" rating and a target price of 450,000 won. The previous session's closing price was 180,000 won.
ROBOTIS' consolidated revenue in the second quarter of this year came to 15.4 billion won, up 95.1% from a year earlier and 29.8% from the previous quarter. Operating profit was 2 billion won, up 726.0% from a year earlier, and it swung to a profit from the previous quarter. The operating profit margin (OPM) was 12.9%. Compared with the market consensus, revenue and operating profit exceeded by 14.3% and 80.2%, respectively.
Choi Geon, an analyst at Korea Investment & Securities Co., said, "Both scale and profitability improved sharply as actuator shipments increased," and added, "Actuators for robots are estimated to have shipped about 200,000 units in the first half of this year, a figure close to last year's annual shipments (240,000 units), which suggests that actuator demand is surging." By region, North America and China led overall growth, with revenue of 5.4 billion won and 1.5 billion won, up 142% and 154% from a year earlier.
Korea Investment & Securities Co. noted that the key to ROBOTIS' future growth is its ability to respond to excess demand. Shipments of the new cycloidal-based model "Dynamixel Y" to major customers in China are scheduled for the second half of this year. "Dynamixel X" is also seeing continued requests for increased production from customers including North American defense contractors.
Choi said, "The key to ROBOTIS' current growth is supply, not demand," and added, "Shipments scheduled for the second half of this year are expected to be about 300,000 units, up 33% from the first half." Choi went on to say, "Along with early expansion of the new Uzbekistan plant, the company will work to secure additional production capacity (CAPA) to meet demand as the humanoid industry expands."
Korea Investment & Securities Co. raised its revenue estimates for this year and next by 4.2% and 18.5%, respectively, to reflect higher actuator demand. However, it lowered profitability to reflect a one-off stock compensation expense that occurred in the first quarter.
Choi said investors should also pay attention to the new data factory business. Choi said, "We are currently collecting physical data at the Magok headquarters, and if revenue is generated from major humanoid customers such as LG(003550), upward revisions to earnings estimates are possible," adding, "We maintain our sector second-preference recommendation."