Even if you bought it just 6 months ago, the rate of return is 50%.
It is 19 times the rate of return on one-year term deposits at commercial banks (based on 2.65% per year). ‘Ggeolmusae’ (a new word created by combining the words to do and a parrot that repeats words) is also an item to be regretted. This is the story of Wisol, ranked 343rd in KOSDAQ market capitalization (KRW 250 billion). The stock price on the 27th was 8,870 won, up 45.41% compared to 6 months ago (6,100 won on October 27, 2023). On the 25th, it hit a 52-week high of 9,130 won.
Wisol is Korea’s only RF (Radio Frequency·Radio Frequency) is a parts company that develops, produces, and sells RF parts necessary for mobile phone communication. September 2008, the core of the business SAW(Surface Acoustic Wave) It was founded as a spin-off from Samsung Electro-Mechanics with filter technology.
In order to operate properly, mobile phones must accommodate all communication methods, such as LTE and 5G, and use numerous frequency bands, including the transmitting and receiving frequencies required for various mobile phone functions. One mobile phone contains approximately 40 surface acoustic wave filters (SAW Filter·A component located under the antenna that enables reception of data, voice, etc. by selectively passing the specific frequency required for mobile phone communication received by the antenna using surface acoustic waves) and a transmitting/receiving switcher (Duplexer)is used, and Wisol is SAW Filter·Duplexer as well as antenna switch·Low noise amplifier (LNA)·Our main business is to supply RF module products that combine various semiconductor devices and single products, such as Low Noise Amplifier, to domestic and foreign mobile phone manufacturers.
Korea’s only RF parts company… Transacted with Samsung Electronics, LG Electronics, etc.
Centered around the Korean corporation, the company has production corporations in Tianjin, China and Hanoi, Vietnam, and a research and development corporation in Japan. In the case of Korea, product development and collaboration with Japanese corporations SAW Filter·RF chips are produced through the fab process, which is the core process for producing duplexers. china·The Vietnamese corporation produces finished products using RF chips made in Korea through a modularization process that uses PCBs to package them or combine them with various semiconductor devices. Major customers are mobile phone manufacturers such as Samsung Electronics, Xiaomi, Oppo, and Vivo. Recently, it has entered the automotive RF parts market and supplies to LG Electronics and LG Innotek, and its competitors include Japan’s Murata and America’s Qualcomm.
Last year, it recorded sales of 369.7 billion won and operating profit of 13.5 billion won. We succeeded in turning a profit compared to the previous year. The proportion of customers is Samsung Electronics at 55%, Chinese mobile phone companies at 43%, and automotive customers such as LG Electronics at 2%. Daishin Securities expects sales of 431 billion won and operating profit of 26 billion won this year.
On the 27th, a Wisol official announced this year’s management strategy, saying, “We are carrying out two key tasks for mid- to long-term growth.” He said, “Through research over the past two years, we have developed a module product (PAMiD, filter + switch + power amplifier) containing PA. We will enter the PAMiD market in the second half of the year, and we expect sales of more than 200 billion won within 2 to 3 years. “He emphasized.
He also said, “We will strengthen our sales capabilities in the automotive RF parts market.” He said, “The TCU (TCU) of recently produced carsTransmission Control Unit·Transmission control device) is equipped with RF components of the same level as mobile phones to perform communication,” he said. “The automotive RF parts market is expected to grow rapidly at an average annual rate of about 15% due to the growth of electric vehicles and autonomous vehicles.” He added, “We have been collaborating with LG Electronics for about three years,” adding, “We expect sales of over 10 billion won in this field this year.” The key point to watch is whether the company will achieve sales of more than 50 billion won within two to three years in a market dominated by Qualcomm in the United States. Based on this business momentum, we aim to achieve sales of 700 billion won and operating profit of 70 billion won by 2027.
The total number of shares is 28,186,941, and the largest shareholder is Daedeok, which holds about 34% of the shares. National pension is 6.03%, treasury stock is 1.83%. Foreign ownership is 4.95%, and distribution volume exceeds 50%. As of the end of last year, it owned 133.6 billion won in cash assets, 11.2 billion won in land, and 39.9 billion won in buildings. This is over 70% of the market capitalization (KRW 250 billion).
It is a burden that Chinese companies continue to attack the RF parts market. They are competing through a low-price offensive based on the support of the Chinese government. However, due to intensifying competition, the Chinese government is reducing indiscriminate support, and due to low technology, there is a large deficit, so the industry believes that price competition will disappear within one to two years.
Stock prices with high targets… KB證 “11,000 won”
Due to expectations for good performance, five securities reports were published this year. Park Kang-ho, a researcher at Daishin Securities, said, “First quarter sales are estimated to be 108.4 billion won (13.1% increase compared to the previous year) and operating profit 7.2 billion won (93.3% increase).” He added, “Amid strong sales of Samsung Electronics’ Galaxy S24, sales of new products for HS filters have increased sales. “Profit margins will exceed estimates,” he predicted. Regarding the meaning of HS filter sales, he said, “Profitability has improved due to increased sales of filter modules, focusing on single products such as saw filters, and annual sales are expected to record more than 400 billion won for the first time this year.” He also expected this year’s operating profit margin to be 5-7% and suggested an increase in the proportion. The target stock price was raised from 7,600 won to 10,000 won.
Choi Seung-hwan, a researcher at Shinhan Investment & Securities, said, “Performance was sluggish between 2020 and 2022 due to intensifying competition and the coronavirus, but it turned into a surplus last year and growth is resuming with new products this year,” adding, “It is judged to be the beginning of a turnaround.”
Lee Chang-min, a researcher at KB Securities, said, “We adjusted the 10-year average ROE (return on equity) estimate upward by 1.1% compared to the previous one to reflect the improvement in cost structure through the decline and internalization of key materials and the improvement in operation rate due to the recovery of downstream demand (ROE 7.4%). →8.5%),” and suggested the highest target stock price of 11,000 won. There is a 24.01% upside potential compared to the current stock price.
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