PI Advanced Material Jincheon Factory. (Photo= PI Advanced Material Homepage)

 

[Alpha Biz= Kim Sangjin] iM Securities Forecasts Growth for PI Advanced Materials, Adjusts Target Price to ₩28,000

iM Securities projected on Monday that PI Advanced Materials would see enhanced growth potential starting this year due to the synergy with Arkema, resulting in regional expansion and product diversification in sectors like aerospace and electric vehicles. The investment firm maintained its "Buy" recommendation but lowered the target price to ₩28,000, reflecting adjustments in its earnings estimates.

iM Securities noted that the company’s Q4 2023 earnings are expected to show a 1.5% increase in revenue to ₩54.2 billion, but operating profit is forecasted to surge by 336.3% to ₩4.8 billion. However, the figures are expected to be weaker than the previous quarter due to lower production rates stemming from client inventory adjustments, which negatively impact profitability.

Particularly, the revenue from PI films for thermal management sheets is expected to decline significantly due to client inventory adjustments, according to iM Securities.

For 2024, iM Securities forecasts PI Advanced Materials’ revenue to increase by 11.2% to ₩278.4 billion, and operating profit to rise by 35.9% to ₩50.3 billion, with profitability expected to improve. They also expect a substantial increase in supply of ultra-thin PI films for new slim smartphone models in the second quarter, which will contribute to higher average selling prices (ASP) and profitability.

Moreover, the demand for PI films in thermal management applications is expected to rise as on-device AI functions grow, along with a recovery in demand for smartphones in China following the National People’s Congress in March.

 

 

 

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