[Edaily Reporter Shin Ha-yeon ] On the 13th, IBK Investment & Securities assessed that DUK SAN NEOLUX CO.,LTD(213420)is seeing improved profitability in its core organic light-emitting diode (OLED) materials business, while the expansion of applications for its high-value-added material, Black PDL, is becoming a reality. The analysis notes that while both the core business and its subsidiaries are expected to post record-high earnings, the stock’s valuation remains at a historic low. The firm maintained its “Buy” rating and target price of 69,000 won, designating the stock as its top pick within the sector.

Kang Min-gu, an analyst at IBK Investment & Securities, stated, “Both the core business and subsidiaries are expected to post record-high earnings, and the expansion of applications for Black PDL—which previously drove multiples—has become a reality.” He added, “Nevertheless, the current stock price is down approximately 39% from its previous high, and the price-to-earnings ratio (PER) based on our estimated 2026 earnings per share (EPS) stands at 9.7x, which is at a historical low.”

DUK SAN NEOLUX CO.,LTD’s second-quarter consolidated revenue reached 94.6 billion won, a 16.9% increase year-over-year, while operating profit rose 80.0% to 18.5 billion won, meeting market expectations. On a standalone basis, revenue increased 9.6% to 52.3 billion won, and operating profit rose 21.2% to 12.3 billion won. Analysts noted that profitability improved, driven primarily by the company’s core OLED materials business.

Although the second quarter is typically the off-season for the display industry due to declining smartphone demand, early production of flagship panels for overseas clients drove the company’s performance. The company also succeeded in improving its product mix by focusing on high-value-added products, as its new flagship panels incorporated not only existing green materials but also black PDL.

Earnings visibility for the second half of the year is expected to improve further. IBK Investment & Securities projected that third-quarter consolidated revenue would reach 112.9 billion won, a 14.8% year-over-year increase, while operating profit would rise 44.2% to 25.2 billion won.

Analyst Kang explained, “Factors to watch in the second half include an expansion in the proportion of high-margin materials driven by the launch of new foldable and flagship models by domestic and international clients, the start of panel production for year-end OLED laptop launches, and the recognition of deferred orders from the previous quarter as clients finalize their inventory adjustments.”

The subsidiary, Hyundai Heavy Industries Turbo Machinery, is expected to experience a temporary earnings gap in the third quarter. This is due to shipment delays caused by the prolonged war in the Middle East, as well as difficulties in securing certain components. However, since the order backlog reached a record high of 391.6 billion won at the end of the second quarter and shipments to U.S. nuclear power plant sites have begun, annual growth is expected to continue.

Analyst Kang stated, “Considering that the order backlog reached a record high of 391.6 billion won as of the end of the second quarter and that shipments to U.S. nuclear power plant sites have begun, we project the subsidiary’s annual revenue to reach approximately 209.7 billion won—a 31.7% increase year-over-year—with an operating profit margin exceeding 15%.”

IBK Investment & Securities projected that DUK SAN NEOLUX CO.,LTD’s consolidated revenue for this year would reach 448.2 billion won, a 30.2% increase year-over-year, with operating profit rising 58.7% to 96.4 billion won. For next year, the firm expects revenue to reach 513.0 billion won and operating profit to reach 111.3 billion won, representing increases of 14.5% and 15.5%, respectively.

The firm also highlighted the stock’s attractive valuation. The closing price of 34,950 won on the 12th corresponds to a P/E ratio of 9.7 times based on this year’s estimated EPS. Compared to the target price of 69,000 won, this represents 97% upside potential.

Analyst Kang stated, “We recommend buying on any stock price pullback,” adding, “We maintain our previous view that this is our top pick within the sector.”