Haesung DS surged more than 11% on a wave of brokerage price-target upgrades, hitting an intraday record high.
According to the Korea Exchange, shares were up 9,000 won, or 11.54%, at 87,000 won as of 2:16 p.m. on Thursday. The stock climbed as high as 87,700 won during the session, setting a new all-time high.
Investor sentiment appeared to improve after multiple brokerages raised their targets. Since the start of this month, Samsung Securities, BNK Investment & Securities, iM Securities, Meritz Securities, Kyobo Securities and Eugene Investment & Securities have all lifted their price targets for Haesung DS. The revised targets range from 92,500 won to about 100,000 won.
The company’s first-quarter profitability, however, temporarily weakened due to higher raw material costs. First-quarter revenue totaled 188.7 billion won, up 37% from a year earlier and 5% from the previous quarter. Operating profit was 11.0 billion won, down 50% from the prior quarter, with an operating margin of 5.8%.
Analysts said profitability was temporarily hurt by a lag between a sharp rise in London Metal Exchange prices and increases in product selling prices, but they expect results to normalize starting in the second quarter as price hikes take fuller effect.
Eugene Investment & Securities analyst Lee Ju-hyung said, “The weak first-quarter results are disappointing, but considering that most of the gap between estimates and actual operating profit was due to the sharp rise in LME prices, we expect the company’s performance to normalize from the second quarter, when the impact of higher selling prices will be reflected in earnest.”
Eugene forecast second-quarter revenue of 195.5 billion won and operating profit of 24.3 billion won, up 24% and 196%, respectively, from a year earlier.
Expectations for a stronger second half are also growing, as mass-production sales of heat spreaders for a new North American customer are expected to be reflected, and supply of new package (PKG) products to a Chinese plant of a domestic IDM company is expected to expand.
Kyobo Securities analyst Park Hee-cheol said, “Although one-off profit deterioration occurred, considering the visible expansion of new product lines for big-tech customers in the lead-frame business and the smooth progress of qualification tests for package substrates, this is a section with high investment appeal compared with peers.”
* This article has been translated by AI.
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