[Edaily Reporter PARK MIN ] On the 4th, Meritz Securities maintained its “Buy” investment rating and target price of 6,500 won for Se Gyung Hi Tech Co., Ltd.(148150), noting that the company’s earnings rebound has begun due to the launch of its clients’ new foldable products and the expanded adoption of optical films. This represents an upside potential of 59.7% compared to the current stock price of 4,070 won.

Yang Seung-soo, an analyst at Meritz Securities, said in a report released that day, “It is regrettable that the earnings slump has persisted longer than expected due to the combined effects of fixed-cost burdens from large-scale investments and a sluggish smartphone market.” He added, “However, starting in 2027, the results of the company’s proactive investments and efforts to secure new clients are expected to become fully visible, and the pace of earnings recovery is projected to accelerate significantly.”

Se Gyung Hi Tech Co., Ltd.’s consolidated revenue for the second quarter of this year was 86.3 billion won, a 15.3% increase year-over-year, while operating profit rose 80.6% to 3.3 billion won. Compared to the previous quarter, the company returned to operating profitability. Sales of protective films (PL) rebounded following the launch of new foldable devices by major domestic clients, driving revenue growth; it was confirmed that Se Gyung Hi Tech Co., Ltd. is the sole supplier (sol-vender) for all three models released this year.

This sharp improvement in performance is expected to continue into the third quarter. Meritz Securities estimates third-quarter revenue at 94 billion won and operating profit at 7.1 billion won—representing year-over-year increases of 20.0% and 176.9%, respectively. Amid continued growth in PL shipment volumes driven by the global success of the Fold 8, analysts expect sales of optical films to be driven by the full-scale reflection of supplies of optical clear adhesive (OCA) films for smartphones and MacBooks to North American clients.

Medium- to long-term growth momentum is also on the horizon. First, the launch of a joint venture with Seed, a Chinese UTG manufacturer, will enable the full-scale joint supply of ultra-thin tempered glass (UTG) and PL. Supplies to Chinese smartphone clients have already been confirmed, and the possibility of securing additional clients remains open. Additionally, the company is developing films for a new form factor to commemorate a North American client’s 20th anniversary. If adopted for the client’s flagship model, the company estimates that full-scale mass production could contribute over 100 billion won in annual revenue.

Meritz Securities forecasts Se Gyung Hi Tech Co., Ltd.’s annual revenue for this year at 312.4 billion won and operating profit at 10.9 billion won. The firm predicts that by 2027, the company will record revenue of 375.9 billion won and operating profit of 25.1 billion won, entering a phase of significant earnings growth.

Analyst Yang Seung-soo stated, “Smartphone manufacturers, facing increasing cost pressures, are turning to form factor diversification as a way out,” adding, “As new form factors expand, we expect structural benefits as both the number of applicable items and the area of component integration increase simultaneously.”