20171019-三星证券-Valuations_attractive_again_6页_386kb

报告摘要

Summary of Duksan Neolux (213420) Company Update

Core Content

This document provides an updated analysis of Duksan Neolux, a company involved in the production of OLED materials, particularly functional layer materials for Apple. It includes financial forecasts, valuation analysis, and investment recommendations from Samsung Securities.

Main Points

Investment Rating: The stock has been upgraded to BUY from HOLD, with a target price of KRW25,000.
Current Price: The current price is KRW20,850, suggesting a 19.9% upside potential.
Market Performance: Over the past year, the stock has seen a 42.8% increase in 6 months and a 36.7% increase in 12 months.
Valuation: After market corrections, the valuation is now considered more comfortable, with a forward P/E of 28.1x and a P/B of 3.6x.
Industry Comparison: The company's valuation is now more attractive compared to Universal Display (UDC), a global OLED materials supplier.

Key Changes

Metric	New Value	Old Value	Change (%)
Recommendation	BUY	HOLD	-
Target Price (KRW)	25,000	23,000	+8.7%
2017E EPS (KRW)	600	570	+5.3%
2018E EPS (KRW)	741	699	+6.0%

Financial Forecasts

Summary Financial Data

Metric	2016	2017E	2018E	2019E
Revenue (KRWb)	42	98	125	135
Net Profit (adj) (KRWb)	5	14	18	20
EPS (adj) (KRW)	195	600	741	833
EPS Growth (% y-y)	115.6	208.2	23.5	12.4
EBITDA Margin (%)	17.3	21.6	20.1	20.4
ROE (%)	4.4	12.4	13.5	13.3

3Q17E Financial Preview

Metric	3Q17E	3Q16	2Q17	% y-y	% q-q
Sales (KRWb)	25.2	8.9	26.8	183.1	-5.9
Operating Profit (KRWb)	4.4	0.8	5.0	483.7	-12.2
Pre-tax Profit (KRWb)	4.6	0.4	5.5	975.5	-16.8
Net Profit (KRWb)	3.4	0.4	4.5	689.4	-24.5

Full-Year Forecast Revisions

Metric	Old (2017E)	New (2017E)	Diff (%)	Old (2018E)	New (2018E)	Diff (%)
Sales (KRWb)	97.7	97.7	0.0	125.0	125.0	0.0
Operating Profit (KRWb)	16.8	17.7	+5.4	20.5	21.8	+6.2
Pre-tax Profit (KRWb)	17.6	18.5	+5.2	21.5	22.8	+6.0
Net Profit (KRWb)	13.7	14.4	+5.2	16.8	17.8	+6.0

Valuation Analysis

Target Price Calculation: Based on a weighted average EPS of 706 KRW and applying the firm's historical average P/E of 36.6x, the fair equity value per share is KRW25,821.
Valuation Ratios:
- P/E (adj): 231.0x (2015) → 34.8x (2017E) → 28.1x (2018E) → 25.0x (2019E)
- P/B (adj): 4.8x (2015) → 4.6x (2016) → 4.1x (2017E) → 3.6x (2018E) → 3.1x (2019E)
- EV/EBITDA: 81.4x (2015) → 62.9x (2016) → 20.8x (2017E) → 16.7x (2018E) → 14.5x (2019E)

Investment Recommendation

Rationale: The company is a key materials vendor in the Samsung OLED value chain. Despite uncertainties in the phosphorescent materials business, the OLED market is expected to remain an oligopoly with no new entrants. The forward P/E gap with UDC has widened, indicating a good buying opportunity.
Ratings:
- BUY: 5 ratings
- HOLD: 3 ratings
- SELL: 2 ratings
- SELL★★★: 1 rating

Analyst Information

Analyst: JungHoon Chang
Research Associate: Hyunseok Cho
Contact: jhooni.chang@samsung.com, hyun162CHO@samsung.com
Date: 2017. 10. 19

Compliance and Disclaimers

The report is not an offer or solicitation to buy or sell securities.
The analyst did not own any shares of the company as of Oct 18, 2017.
The report is subject to change without notice and not guaranteed for accuracy or completeness.
Distribution Restrictions: Applies to different regions including the US, UK, Singapore, and Korea.

Conclusion

Duksan Neolux is a key player in the OLED materials market, particularly with its role in supplying Apple. Despite challenges in earnings forecasting, the company's valuation is now more attractive, and the upgrade to BUY reflects improved market sentiment and a 19.9% upside potential. The target price of KRW25,000 is based on historical P/E ratios and projected earnings, suggesting a strategic buy for investors.

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