[Edaily Reporter Kwon Oh Seok ] Meritz Securities announced on the 7th that it is maintaining its “Buy” rating on Fine M-Tec Co.,Ltd.(441270)and raising its target price from 12,000 won to 13,000 won.

Yang Seung-soo, an analyst at Meritz Securities, stated, “The success of the Fold 8 has demonstrated the market’s potential demand for wide-screen foldable form factors. We also expect the foldable model from a North American client, scheduled for release on September 10, to accelerate the expansion of the foldable market’s user base and its mainstream adoption, thanks to its high design quality and the iOS ecosystem.”
He continued, “Accordingly, rather than focusing on short-term sell-on opportunities, attention should be directed toward the medium- to long-term growth potential of the foldable market and the resulting structural benefits.” He added, “Since there are only a limited number of domestic companies that have secured a meaningful market share in the foldable models of North American clients, Fine M-Tec Co.,Ltd.’s differentiated benefits and investment appeal are expected to come to the fore.”
For the third quarter, the firm projected consolidated revenue of 135.7 billion won (up 135.9% year-over-year) and operating profit of 11.9 billion won (up 674.6%). Unlike the past two years, when earnings peaked in the second quarter due to the early launch of new foldable products by domestic clients, the firm expects additional earnings growth in the third quarter this year.
Analyst Yang explained, “This is because mass production volumes of backplates for domestic clients are remaining at a high level, driven by the success of the Fold 8,” adding, “While there are some supply disruptions affecting key components such as DDIs (display driver ICs), the overall shipment trend appears to be remaining robust.”
He added, “Shipments to North American customers are also expected to begin in the third quarter, and we are projecting shipments of 6.5 million units (based on finished devices) and 8 million panels this year. However, shipments to North America this year are expected to expand more significantly in the fourth quarter than in the third due to yield issues in other parts of the value chain,” he noted, emphasizing, “The positive aspect is that, as a result, additional earnings growth compared to the third quarter is expected even in the fourth quarter, which is typically a seasonal slow period.”
He further noted, “Given the symbolic significance of this model as the North American client’s first foldable device, quality stability is the top priority during the initial mass production phase. Consequently, a key point to watch is whether the company—which has secured a competitive edge in quality in the laser etching process compared to Chinese competitors—will be able to further expand its market share.”