Heungkuk Securities maintained its target stock price of 50,000 won and its investment opinion of "buy", saying that Novatek's earnings growth is continuing due to rapid growth in the tablet market.
"Its appearance and profits fell slightly year-on-year, but it is a good performance in terms of normalizing operation of the Vietnamese production corporation and the overall rise in raw materials despite the impact of COVID-19," Heungkuk Securities said.
Heungkuk Securities said, "The operating profit ratio, which had decreased due to one-off costs stemming from the exchange of common shares of exchange bonds in the previous quarter, has also returned to the 40% range.".
Heungkuk Securities also said, "Novatek is a company that specializes in developing and producing magnets and related applied products such as magnets and magnet plates," adding, "The competitiveness of Shield Magnet, which is continuously expanding its application of smart devices, is its strength, and its performance is growing due to the rapid growth of the tablet market.".
"Novatek will supply shielding seats for major customers' smartphones from the fourth quarter, and this year's initial supply is not large, but with this opportunity, we expect to supply more next year," Heungkuk Securities said.
Heungkuk Securities added, "This is a very positive sign that the number of products applied for smartphones is increasing from tablet, which is the main application product.".
Heungkuk Securities explained, "As of the fourth quarter, the performance trend is continuing smoothly, and it is understood that the supply of new tablet products from customers has begun next year.".
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
