[THE INVESTOR] SKC Kolon PI will grow significantly on the back of rising demand for polyamide film, said Hanwha Investment and Securities on March 16, raising the target price to 20,000 won (US$17.67) from 15,000 won.
The application of PI films is expanding from FPCB and heat-radiating sheets to flexible OLED, which will boost the earnings of the company, said analyst Kim Byeong-gi.
PI, the toughest plastic against heat with flexibility, is used for the thin film transistor for flexible OLED, and the market is estimated to be worth 20 billion won. Considering the worldwide expansion in manufacturing facilities, it will grow tenfold by 2020, according to the analyst.
Currently the market is dominated by SU Materials, a joint venture between Samsung Display and Japan’s Ube Industries. SKC Kolon PI has improved its market share and will be able to secure 25 percent at the least, estimated Kim.
This year, the company’s revenue will rise 15 percent on-year to 175.9 billion won and operating profit by 25 percent to 40.4 billion won, said the analyst.
“The earnings will be impacted by the release of new smartphones as North American smartphone makers adopt flexible OLED.”
The firm is also investing in an exclusive manufacturing line for PI for thin film transistors, which will aid growth momentum from next year, he added.
By Hwang You-mee (glamazon@heraldcorp.com)