20170707-三星证券-Poised_to_gain_momentum_in_2H_11页_427kb

Viewworks Summary

Core Content

Viewworks is a company that has been analyzed for its financial performance and future growth potential. The document provides a detailed overview of its recent performance, forecasted financials, and valuation analysis, with a particular focus on its medical imaging and industrial-use camera segments.

Main Points

Current Stock Performance

• Current Price: KRW55,500
• Target Price: KRW72,000
• Upside Potential: 29.7%
• Market Cap: KRW555.1b / USD479.61m
• Shares (float): 10,001,865
• 52-week High/Low: KRW72,100 / KRW49,250
• Avg Daily Trading Value (60-day): KRW4.5b / USD3.9m

One-Year Performance

Key Changes in Forecasts

Analyst's View

• Despite a slight miss in 2Q performance, the company is expected to rebound with solid results in 3Q.
• The analyst maintains a BUY recommendation due to the company's strong medium-to-long-term growth potential.

Medical Imaging Business

2Q Performance

• Sales: KRW31.4b (vs consensus of KRW31.2b)
• Operating Profit: KRW7.0b (vs consensus of KRW7.6b)
• Net Profit: KRW6.0b (vs consensus of KRW6.4b)
• Operating Margin: 22.3% (down 1.2% pts y-y)
• Medical Imaging Sales: KRW18.4b (up 7.6% y-y)
• FP-DR Detector Sales: KRW15.9b (up 33.4% y-y)

Challenges in 1Q

• Medical-use imaging sales declined due to:
  1. A 10% drop in ASP for DR detectors.
  2. Sluggish domestic demand.
  3. US dollar depreciation affecting competitiveness.

Future Outlook for 2H

• Medical-use imaging sales are projected to grow by 14.8% y-y to KRW50.1b in 2H.
• The US retrofit market is expected to drive growth, with Medicare reimbursement cuts for CR equipment likely to accelerate adoption of DR detectors.
• Viewworks is expected to benefit from the growing US DR market penetration (50% in 2016), with a 31.3% share of its sales coming from this market.

Industrial-Use Camera Sales

• 2Q Sales: KRW13.0b (up 101.7% y-y, down 13.3% q-q)
• 3Q Sales: KRW15.6b (up 31.8% y-y, up 19.4% q-q), which is a quarterly record.
• OLED Industry Capex Hikes: Expected to drive continued growth in industrial-use camera sales.
• Industrial-Use Cameras Account for 40% of Sales: Up from historic peaks of 70-80% for medical-use detectors.

New Products and Market Position

• TFT-based Dynamic Detectors: Viewworks has launched a new product that can capture moving images, making it the world's third seller of such detectors, alongside Varex Imaging and Trixell.
• Market Potential: The global dynamic detector market is valued at KRW300b-400b and is expected to grow at 5% CAGR through 2020.
• Sales Forecasts: Dynamic detector sales are projected to reach KRW9.9b in 2017 and KRW19.6b in 2018.
• Price Advantage: Dynamic detectors are priced 1.5x higher than static detectors, with similar COGS.

Valuation and Market Position

Sum-of-the-Parts Valuation

Valuation Comparisons

Valuation Metrics

Conclusion

• Buy Recommendation: Despite a 17.2% drop in the target price to KRW72,000, the analyst maintains a BUY rating due to the company's solid medium-to-long-term growth potential.
• Key Drivers: The medical imaging segment is expected to rebound in 2H, with the US retrofit market and dynamic detector sales as key growth areas.
• Industrial Camera Segment: Expected to continue strong performance due to OLED industry capex and potential orders in China.
• Valuation: Viewworks is currently undervalued relative to its growth prospects and is projected to have a fair value of KRW715.4b, which is 22x forward P/E.