(Photo = Getty Image Bank)
As organic light-emitting diodes (OLED) emerged as a’popularity’ in the display market, the market’s interest is attracting attention to OLED material manufacturers. As the news that major customers’ OLED displays will be mounted on large TVs, tablet PCs, notebooks, and electric vehicles as well as smartphones, the stock price of material stocks is also drawing an upward curve. Deoksan Neolux, a representative OLED material owner(40,150 -3.49%)Rose by more than 15% only this year on the back of net institutional purchases.
○ Good performance in the fourth quarter on the effect of iPhone 12
OLED material stocks performed well in the fourth quarter. All models of Apple’s iPhone 12 are equipped with OLED panels, and Samsung Electronics’ Galaxy S21 is also released earlier than the previous year, and sales of OLED materials for smartphones increased.
Deoksan Neolux, a leading material maker that produces OLED organic materials, recorded the highest quarterly results in the fourth quarter. Sales increased 57% year-on-year to 43.5 billion won, and operating profit increased 55.4% to 14.3 billion won, which exceeded the consensus by 31.2%. The agency net purchased Deoksan Neolux stock worth 27.5 billion won for 9 consecutive trading days from the 26th to the 5th of last month, and the market cap exceeded 1 trillion won for the first time on the 5th intraday. On this day (8th), it ended at 4,150 won, down 3.49%, and it started to take a breath after the rise.
PI Advanced Materials(42,750 +4.01%)Finished the market at 42,750 won, up 4.01%. This is thanks to the results announced after the close of the trading day immediately before. This company is a manufacturer of polymide (PI) film, and PI film is used as a material for cover windows that protect the display of smartphones. It posted an operating profit of 16.8 billion won, an increase of 180% in the fourth quarter of last year.
Innox Advanced Materials(47,650 -2.16%)Generates about 40% of sales from OLED materials. Operating profit in the fourth quarter rose only 5.4% year-on-year, but in the first quarter of this year, as large-sized OLED orders normalize, operating profit is expected to surge 143%. However, after hitting the highest price in September last year, the stock price has moved sideways and has only risen 6% in the last three months. This year, it recorded a lower rate of increase (4.49%) than Deoksan Neolux (15.20%) and PI Advanced Materials (15.54%). Kim Hyun-soo, Hana Financial Investment Research Institute, said, “The fact that the demand for Ennox Advanced Materials is diversified in the recent market atmosphere that responds to certain momentum has limited the stock price spike.”
○ “I look forward to more this year” in expanding the OLED market
The securities industry predicts that OLED material stocks will continue to improve their earnings this year. It is an analysis that demand for OLED materials will increase as 5th generation (5G) smartphones and foldable smartphones become popular. OLED is thinner, lighter than LCD, and has better image quality, so it is attracting attention in the premium smartphone market. According to Hana Financial Investment, the OLED penetration rate in the entire smartphone market is expected to rise from 28% in 2019 to 34% this year.
It is also a good news that major customers have increased the production of OLED panels for notebooks and TVs, as well as diversified demands. “Samsung Display is increasing the production of OLED panels for notebook computers, and in the second half of the year, it will produce large-scale quantum dot organic light-emitting diode (QD OLED) panels for TVs,” said Jung Seok Won, a researcher at Hi Investment Securities. About 350 times that of a smartphone,” he explained. It is expected that the use of OLED will increase in future mobility such as electric vehicles and autonomous vehicles, such as announcing that Hyundai Motor will install Samsung Display’s OLED in the camera system of Ioniq 5.
The performance level is also rising. According to F&Guide, a financial information company, Deoksan Neolux’s operating profit consensus this year is 13.3% higher than three months ago. This year’s sales and operating profit are estimated at 1719 billion won (19.2% increase from last year) and 44.8 billion won (20.9% increase), respectively. Kim So-won, a researcher at Kiwoom Securities, predicted that “Duksan Neolux is producing 100% of its sales from OLED materials, which will benefit the most from expanding the downstream market.”
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