Documentos de Académico
Documentos de Profesional
Documentos de Cultura
It will take about a year before ingot makers complete their capacity 7,000
6,000
expansion currently underway. As such, although they will raise LED TV 5,000
ingots’ portion to 50% of their total ingot output, LED supply will remain 4,000
3,000
tight for the time being. We estimate demand for LED packages will be
2,000
14.4bn in 2010 but the supply forecast for 2010 (13.6bn units of LED 1,000
packages) satisfies only 95% of the demand forecast. We expect supply 0
1Q10 2Q10E 3Q10E 4Q10E 1Q11E 2Q11E 3Q11E 4Q11E
(25.4bn units) will still not meet demand (25.5bn units) in 2011. Demand Supply
combined W1.4tn into expanding their TV BLU capex and are expected to 10
record operating margins of over 10%. With global LED TV demand likely to 0
soar 148%, from 37mn units in 2010 to 92mn units in 2011, we expect the (10)
market in 2010. In addition, 3D TVs require 30% more LED chips than 60,000 25
existing LED TVs, for high lamination and refresh rates. Coupled with 3D 50,000
20
TV, Chinese demand for LED TVs will drive the global LED market. 40,000
15
China is expected to constitute 20% of the global LED TV market in 30,000
3Q10, up significantly from 5% in 4Q09. 20,000
10
5
10,000
0 0
4Q09 2Q10E 4Q10E 2Q11E 4Q11E 2Q12E 4Q12E
Hedge fund investors Long-only investors Global LED TV (lhs) China (lhs) Portion (rhs)
Take advantage of the upcoming LED Tight LED package supply will secure
market’s upside rally, as seasonally LED makers’ remarkable earnings Soon-Hak Lee, Korea Analyst
strong demand is to come in 2H10. growth until 2011 +82 2 3774 1651 shlee79@miraeasset.com
Average over 50% of profit CAGR Jubi Park, Korea Analyst
expected for LED makers
+82 2 3774 1938 jubi.park@miraeasset.com
See the last page of this report for important disclosures Source for data: Bloomberg, companies, Mirae Asset Research
1
Soon-Hak Lee, Handset Analyst, 82 2 3774 1651 shlee79@miraeasset.com Korea/Display 15 July 2010
Jubi Park, Small-cap Analyst, 82 2 3774 1938 jubi.park@miraeasset.com
C O N T E N T S
COMPANY SECTION
Lumens [038060 KS, BUY]: Economies of scale achieved with China plant ........ 10
Flagging sales but improved operating margin 10
Expectations of 2H peak season 11
Profit growth through economies of scale 11
Summary financial statements 12
2
Soon-Hak Lee, Handset Analyst, 82 2 3774 1651 shlee79@miraeasset.com Korea/Display 15 July 2010
Jubi Park, Small-cap Analyst, 82 2 3774 1938 jubi.park@miraeasset.com
1. Executive Summary
LED companies showed remarkable earnings growth in 1H10. Both their sales and operating CE retailers will attempt to offset
profit are showing exponential growth, as LED chip and package prices remain strong on slowing white CE sales by
boosting LCD TV sales
persistent strain on LED supply. Their notable earnings performance was fueled by Korea’s top-
2 TV and LCD panel makers’ dominant market leadership. We expect LED companies will see
another leap in earnings in 2H10, on growing LED TV demand. While the global LED TV
demand forecast for FY10 is 37m units, actual LED TV sales stood at only 10m units in 1H10.
This points to at least 20m LED TV sales globally in 2H10, and another earnings rally for key
domestic players.
We expect LED supply to remain tight through 2011. Although LED makers will raise the LED
TV BLU portion of total chip output to 50%, LED TV supply will not likely increase dramatically,
due to productivity issues. We estimate for 2010, LED package demand (14.4bn) should
outstrip supply (13.6bn units) by roughly 5%. We expect the slight undersupply of LED
packages to continue into 2011, as supply (25.4bn units) will still not meet demand (25.5bn
units). Given this supply forecast is mainly for 2” substrates, the supply strain can be resolved
earlier than expected, depending on output portions of 4” and 6” substrates. However,
considering that it will take quite some time before the chip production yield for larger-sized
substrates improves to the level of 2” substrates, we expect the supply to remain tight though
1H11, at least.
Domestic LED companies, particularly Samsung LED, saw their earnings rise steeply. Samsung LED makers’ dramatic earnings
LED logged sales of W330bn and operating profit of W51.2bn in 1Q10, and is expected to growth was powered by surging
demand for LED TV BLU. Most
report a 30.7% QoQ rise in sales (W431.3bn) and an 87.3% QoQ surge in operating profit
domestic LED players, except
(W95.9bn) for 2Q10. We forecast LG Innotek to report an operating margin of 7.5% for 2Q10, Seoul Semiconductor, generate
as its LED division, having remained in the red until FY09, turned profitable in 1Q10. Seoul over 80% of sales from their LED
Semiconductor expects to report sales of over W200bn and operating margin of 12% for 2Q10, TV BLU divisions.
as it raised the sales contribution from TV BLU LED from 15% in 1Q10 to 40% in 2Q10.
Lumens, a supplier of LED packages to Samsung Electronics, expects to turn in an operating
margin of 9.3% for 2Q10.
In 2H10, four domestic LED makers are expected to grow rapidly, benefiting from LED TV
market growth on 3D TV sales and Chinese demand. Demand for LED chips will rise not only
because 3D TVs require 30% more LED chips than existing LED TVs, for high lamination and
refresh rates, but the proportion of LED TVs in the Chinese LCD TV market is also expected to
expand from 5% in 4Q09 to 20% in 3Q10. Before seasonally busy 3Q10, LED chip makers
have completed their capacity expansion. Given this, we expect their sales to grow 20 to 40%
QoQ, yielding double-digit operating margins in 2H10.
Our top picks for the LED sector include LG Innotek (011070, BUY, TP: W230,000), which is
seeing rapid earnings growth in its LED division, and Samsung Electro-Mechanics, which
delivers steady earnings from the LED, MLCC and substrate business divisions.
3
Soon-Hak Lee, Handset Analyst, 82 2 3774 1651 shlee79@miraeasset.com Korea/Display 15 July 2010
Jubi Park, Small-cap Analyst, 82 2 3774 1938 jubi.park@miraeasset.com
For the most commonly used 2” sapphire substrate, only 70% of the substrate (1,410mm2) will
be used to produce chips, because of edging and sawing losses. Given this, we estimate 2,820
1mmx0.5mm LED chips (the most commonly used TV BLU chips), will be produced from each
substrate. Factoring in yields in production of substrates, TVs and packaging, we estimate
1,567 LED TV packages will be produced from one substrate.
(mn unit)
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
1Q10 2Q10E 3Q10E 4Q10E 1Q11E 2Q11E 3Q11E 4Q11E
Demand Supply
4
Soon-Hak Lee, Handset Analyst, 82 2 3774 1651 shlee79@miraeasset.com Korea/Display 15 July 2010
Jubi Park, Small-cap Analyst, 82 2 3774 1938 jubi.park@miraeasset.com
The leading global sapphire ingot makers are Rubicon (US), Monocrystal (Russia), and
Sapphire Tech (Korea). Hansol LCD has recently made a foray into the global ingot market, and
is expected to produce ingots from 2H11. We project global sapphire ingot production capacity
to reach 2.15mn/month by end-2010 and grow only 80% YoY to 3.87mn/month by end-2011.
Meanwhile, since LED TV demand is forecast to climb 148% YoY in 2011, we anticipate tight
supply to continue, even assuming that the number of LED chips required for LED TVs drops
5% each quarter.
So, will LED supplies remain tight by end-2011? We made the aforementioned LED supply
forecast based on 2” substrates. However, given that the mass-production of 4” substrates is
already underway, and that of 6” substrates is likely to begin early FY11, we anticipate the
production yield should rise further. Considering that chipmakers can produce 14% more chips
from 4” substrates, 44% more chips from 6” substrates compared with 2” substrates, we believe
supply strains can be resolved earlier than expected, depending on output portions of 4” and 6”
substrates. However, given that most ingot makers currently focus on producing 2” substrates,
their entry into the larger-sized ingot market is unlikely to accelerate. Overall, we foresee LED
chip supply shortages continuing into at least 1H11.
Global LED TV 3,077 6,442 9,846 17,693 15,726 19,086 23,127 34,440
Direct type portion 18% 12% 10% 9% 9% 10% 9% 10%
Edge type portion 82% 88% 90% 91% 91% 90% 91% 90%
Direct type 548 756 960 1,645 1,441 1,834 2,180 3,362
Edge type portion 2,529 5,686 8,886 16,048 14,285 17,252 20,947 31,078
Over 40" portion 65% 51% 45% 42% 40% 41% 40% 39%
Under 40" portion 35% 49% 55% 58% 60% 59% 60% 61%
Over 40" 1,642 2,906 4,028 6,685 5,732 6,997 8,423 11,984
Under 40" 887 2,780 4,858 9,363 8,553 10,255 12,524 19,094
LED PKG necessity
Avg direct type 2,000 1,800 1,620 1,458 1,385 1,316 1,250 1,188
Avg edge type (>40") 270 257 244 231 220 209 198 189
Avg edge type (<40") 180 171 162 154 147 139 132 126
Total PKG necessity 1,698,992 2,581,601 3,325,844 5,390,925 4,510,457 5,303,424 6,053,973 8,652,261
Setmaker PKG demand 2,140,297 2,953,722 4,466,203 4,842,872 4,906,940 5,678,698 7,526,162 7,393,084
Ingot capa (K mm/m) 1,415 1,634 2,036 2,145 2,404 2,749 3,611 3,870
Utilization rate 95% 95% 95% 95% 95% 95% 95% 95%
LED BLU portion 40% 45% 50% 50% 50% 50% 50% 50%
Sapphire wafer (Q) 1,452 1,886 2,611 2,751 3,083 3,525 4,631 4,963
PKG for LED BLU 2,275,037 2,955,538 4,090,846 4,310,914 4,830,937 5,524,301 7,257,710 7,777,733
Demand - Supply 134,741 1,816 (375,356) (531,958) (76,004) (154,398) (268,452) 384,648
Source: Company data, Mirae Asset Research
5
Soon-Hak Lee, Handset Analyst, 82 2 3774 1651 shlee79@miraeasset.com Korea/Display 15 July 2010
Jubi Park, Small-cap Analyst, 82 2 3774 1938 jubi.park@miraeasset.com
The LED market is indeed on an exponential growth path. It’s no wonder, then, that Samsung
LED and LG Innotek, with immense captive markets (Samsung LED, and LG Innotek,
respectively), are set to grow explosively, going forward. Moreover, Seoul Semiconductor and
Lumens, even without captive markets, anticipate their operating profit to surge 137% YoY and
465% YoY, respectively, in FY10.
LED players’ remarkable earnings growth has been fueled by LED TV. Samsung Electronics LED players’ impressive earnings
secured first mover advantage in the global LED market, offering an immediate boon to growth has been fueled by robust
demand for LED TVs. For most
Samsung LED. Lumens’s stronger-than-expected earnings were also possible as it focused on domestic players, except Seoul
producing TV BLU LED to be shipped to Samsung Electronics. Seoul Semiconductor’s earnings Semiconductor, the sales
growth has also been accelerating as the company began to supply TV LEDs. The company is contribution from LED TVs is over
likely to raise its sales contribution from LED TV to 50% in 4Q10 from 15% in 1Q10. LG Innotek, 80%.
increasingly focused on TV BLU, anticipates its operating margin topping 7% in 2H10 and 10%
in early FY11, when the mass production of 6” substrates will begin.
6
Soon-Hak Lee, Handset Analyst, 82 2 3774 1651 shlee79@miraeasset.com Korea/Display 15 July 2010
Jubi Park, Small-cap Analyst, 82 2 3774 1938 jubi.park@miraeasset.com
(%)
30
20
10
(10)
(20)
(30)
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10E 3Q10E 4Q10E
(%)
100
80
60
40
20
(20)
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10E 3Q10E 4Q10E
(%)
100
80
60
40
20
0
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10E 3Q10E 4Q10E
7
Soon-Hak Lee, Handset Analyst, 82 2 3774 1651 shlee79@miraeasset.com Korea/Display 15 July 2010
Jubi Park, Small-cap Analyst, 82 2 3774 1938 jubi.park@miraeasset.com
We expect a minimum of 20m shipments of LED TVs in 2H10, even factoring in fluctuations in
demand on global economic conditions. As a result, four domestic LED manufacturers are forecast
to post 2H10 earnings nearly double those of 1H10. They began capex to expand capacity early
this year and nearly completed it in 2Q10, which we believe means they are prepared to grow in
line with the demand increase in 2H10. The fact that combined capex of domestic LED-makers
amounts to W1.4tn in 2010 is evidence of how fast the LED industry is expanding.
Figure 9. LED TVs forecast to make up over 50$ of the LCD TV market in 2012
(K units) (%)
60,000 70
50,000 60
50
40,000
40
30,000
30
20,000
20
10,000 10
- 0
1Q10 3Q10E 1Q11E 3Q11E 1Q12E 3Q12E
LED TV (lhs) LED TV portion (rhs)
Japan 488 691 1,014 1,887 1,368 1,841 1,510 2,246 1,438 1,585 1,808 2,268
North America 830 1,947 2,704 4,276 3,409 5,024 5,910 7,486 5,728 7,688 8,379 10,315
Western Europe 831 1,900 2,550 5,110 4,925 5,369 5,666 10,099 7,791 8,035 7,516 12,653
Eastern Europe 88 295 523 1,191 882 981 1,435 2,302 1,585 1,846 2,038 3,189
China 479 835 1,910 3,315 3,146 2,999 4,724 6,630 5,351 5,103 7,356 9,408
Asia Pacific 186 398 582 1,004 1,131 1,475 1,860 2,623 2,669 3,214 3,811 5,120
Latin America 98 232 349 594 502 841 1,291 2,028 1,076 1,618 2,288 3,372
Middle East & Africa 77 143 212 317 364 555 730 1,025 880 1,211 1,476 1,954
Total 3,077 6,442 9,846 17,693 15,726 19,086 23,127 34,440 26,519 30,300 34,673 48,281
Source: DisplaySearch, Company Data, Mirae Asset Research
8
Soon-Hak Lee, Handset Analyst, 82 2 3774 1651 shlee79@miraeasset.com Korea/Display 15 July 2010
Jubi Park, Small-cap Analyst, 82 2 3774 1938 jubi.park@miraeasset.com
3D TVs merit a price premium as their luminance and refresh rates are higher than existing LED
TVs. LED for 3D TVs are selling at 20 to 40% higher price than other LEDs, and a hearty 57%
higher than CCFL, as 3D TVs require approximately 30% more LED chips than existing LED TVs.
This is in order to prevent darkness of screens with 240Hz refresh rates in the high-speed frame.
LG Electronics, meanwhile, released direct LED-based 3D TVs in an effort to differentiate its
products from others’. Its 55” 3D TV uses 1,500 LED chips. This means that 3D TVs will postpone
a reduction in the number of LED chips used in TVs, benefiting LED manufacturers in the end.
Figure 11. 3D TVs merit 20-40% price premium to existing LED TVs
Brand Model CCFL/LED 3D Size Resolution Rate Price($) Premium
China is believed to have grown to become the largest LED TV market in 2Q10, making up 13%
of global demand for LED TVs. From 3Q10, its contribution is likely to exceed 20%, driving
growth of the global LED TV market through 2012.
Figure 12. LED TVs’ price premium over LCD TVs in key markets
Price(US$) Premium(%)
Figure 13. China forecast to account for over 20% of the global LED TV market from 3Q10
(K units) (%)
60,000 25
50,000
20
40,000
15
30,000
10
20,000
5
10,000
0 0
4Q09 2Q10E 4Q10E 2Q11E 4Q11E 2Q12E 4Q12E
9
Korea/ Tech Hardware & Equipment Earnings review
Soon-Hak Lee, Korea Handset Analyst, 82 2 3774 1651 shlee79@miraeasset.com Target price W18,000
Current price (13 July 2010) W12,600
Upside/downside 42.9%
Consensus target price W17,000
Difference from consensus 5.9%
Economies of scale achieved
with China plant Forecast earnings & valuation
Fiscal year ending Dec-09A Dec-10E Dec-11E Dec-12E
We maintain our Buy rating and target price of W18,000 on
Revenue (KRWb) 133.0 311.4 456.9 551.3
Lumens. The reasons for our positive view are threefold: (1) Op EBIT (KRWb) 5.72 32.33 52.27 65.81
the company widened operating margin in 2Q10, despite Net income (KRWb) 5.20 27.47 43.16 54.57
sales slightly below estimates due to sluggish European Norm profit (KRWb) 5.20 27.47 43.16 54.57
EPS (KRW) 153 692 1,087 1,374
markets and delayed operation of its Chinese plant; (2) we EPS growth NA 351.0% 57.1% 26.4%
expect Lumens to improve profitability through economies of Norm P/E (x) 82.17 18.22 11.59 9.17
scale achieved after it expanded production capacity for LED EV/EBITDA (x) 29.70 12.20 8.03 6.07
Dividend yield 0.00% 0.00% 0.79% 1.19%
packages to 170m units per month, ahead of peak season; P/B (x) 4.88 4.34 3.24 2.46
and (3) the fall in LED package prices will be limited due to ROE 9.4% 27.1% 32.0% 30.5%
the shortage of LED raw materials. We are encouraged that Net debt/equity
Cons EPS (KRW)
36.6%
153
21.7%
714
4.5%
1,017
(17.8%)
1,374
Topaz, in which Lumens has a 44.3% stake, is expected to Prev EPS (KRW) 135 752 991 1,287
benefit from insufficient supply of ultra-bright-light guide
plates (LGP), a key component of LED TVs. Our target price Earnings quality score
implies 16.5x FY11E EPS, which is undemanding, given
three-year EPS CAGR of 108%. Sector Average: 55
0 25 50 75 100
» Profit growth through economies of scale
Performance
Flagging sales but improved operating margin 16,900
Price Close Relative to .KS11 (RHS)
416
For 2Q10, we expect Lumens to post sales of W67.7bn, 10% below our 14,900 366
estimate of W75.2bn, as (1) set makers adjusted inventories due to the 12,900 316
10,900 266
European economic slowdown; and (2) operation of the company’s plant
8,900 216
in Kun Shan, China was delayed for two months. However, operating 6,900 166
margin is estimated at 9.3%, ahead of our estimate, and operating profit 4,900 116
See the last page of this report for important disclosures Source for data: Company, Bloomberg, Mirae Asset Research
10
Soon-Hak Lee, Korea Handset Analyst, 82 2 3774 1651 shlee79@miraeasset.com Lumens 16 July 2010
038060 KS
(W bn, %) 2Q10E 2Q10E Diff. (%, %p) 1Q10 QoQ (%,%p) 2Q09 YoY (%, %p)
Revenue 75.2 67.7 -10.0% 50.5 34.1% 23.2 192.4%
OP 6.8 6.3 -6.7% 4.1 54.7% 0.2 2965.2%
Pre-tax profit 6.3 6 -9.2% 3.4 67.0% 0.1 4326.5%
NP 5.8 5 -9.2% 2.7 92.2% 0.5 870.2%
Operating Margin 9.0% 9.3% 0.3 8.1% 1.2 0.9% 8.5
Net Margin 7.7% 7.8% 0.1 5.4% 2.4 2.4% 5.5
Source: Company data, Mirae Asset Research
11
Soon-Hak Lee, Korea Handset Analyst, 82 2 3774 1651 shlee79@miraeasset.com Lumens 16 July 2010
038060 KS
Op EBITDA 8 15 43 63 77
Depreciation (3) (7) (10) (10) (10)
Amortisation (2) (2) (1) (1) (1)
Op EBIT 3 6 32 52 66
Net interest (1) (2) (2) (2) (1)
Associates and JCEs - - 0 2 2
Other income (5) 1 (0) (2) (2)
Net exceptional income - - - - -
Profit before tax (3) 4 30 51 64
Tax 1 1 (3) (8) (10)
Post-tax profit (2) 5 27 43 55
Minorities - - - - -
Preferred dividends
Net income (2) 5 27 43 55
Norm profit (2) 5 27 43 55
Dividends - - - (4) (6)
Retained earnings (2) 5 27 39 49
S ource: C ompany data, M irae A sset Research estimates
Cashflow
Op EBITDA 8 15 43 63 77
Decrease in working capital (13) (24) (20) (16) (3)
Other operating cashflow (1) 1 4 (6) (6)
Operating cashflow (6) (8) 27 40 68
Tax paid 1 1 (3) (8) (10)
Net interest (1) (2) (2) (2) (1)
Dividends received - - 0 2 2
Cashflow (6) (9) 22 33 59
Capital expenditure (8) (45) (15) (12) (12)
Net acquisitions - - - - -
Net investments (4) (1) (5) (3) (2)
Other investing cashflow 8 (17) 2 3 2
Investing cashflow (4) (63) (19) (13) (11)
Dividends paid - - - (4) (6)
Increase in equity 7 60 0 - (0)
Increase in debt 26 20 3 - -
Other financing cashflow (26) (2) 3 2 1
Financing cash flow 7 79 7 (2) (5)
Beginning cash 13 9 16 26 44
Total cash generated (4) 6 10 18 43
Forex effects
Ending cash 9 16 26 44 87
S ource: C ompany data, M irae A sset Research estimates
12
Soon-Hak Lee, Korea Handset Analyst, 82 2 3774 1651 shlee79@miraeasset.com Lumens 16 July 2010
038060 KS
Balance Sheet
Key Ratios
13
Korea/Tech Hardware & Equipment Earnings review
Jubi Park, Handset Analyst, +82 2 3774 1938 jubi.park@miraeasset.com Target price W80,000
Current price (13 July 2010) W57,800
Upside/downside 38.4%
Consensus target price W72,500
Difference from consensus 10.3%
Positive evolution continues
We maintain our Buy rating and target price of W80,000 on
Hansol LCD based on three principle investment points: (1) Forecast earnings & valuation
the rapidly increasing proportion of LEDs used in total Fiscal year ending Dec-09A Dec-10E Dec-11E Dec-12E
backlight unit (BLU) output, leading to (2) growing sales Revenue (KRWb) 1,102 1,492 1,655 1,925
Op EBIT (KRWb) 11.24 22.02 34.60 41.78
visibility; and (3) Hansol’s prospects for successful entry into Net income (KRWb) 21.16 35.59 46.03 53.38
new businesses, including LED sapphire ingots and solar cell Norm profit (KRWb) 21.16 35.59 46.03 53.38
modules. We see our target P/E of 14x 12-month forward EPS (KRW)
EPS growth
3,233
234.7% 57.1%
5,078 6,142
21.0%
7,122
16.0%
EPS of W5,570 undemanding given the likelihood Hansol will Norm P/E (x) 17.94 11.42 9.44 8.14
successfully enter new business lines and the company’s EV/EBITDA (x) 11.87 8.00 6.03 5.12
Dividend yield 0.396% 0.000% 0.413% 0.413%
overall business stability supported by steady LED BLU sales P/B (x) 3.01 2.03 1.78 1.47
(comprising 64% of total sales). ROE 18.0% 21.8% 20.7% 19.7%
Net debt/equity 0.3% (7.2%) (15.8%) (17.5%)
Cons EPS (KRW) 3,233 5,405 6,368 7,122
» 2Q10 sales and operating profit to rise 35.1% YoY, 99.6%
Prev EPS (KRW) 3,344 6,082 6,988 7,421
YoY
» Higher portion of LED BLU sales will lead to greater Earnings quality score
increase business reliability
Sector Average: 55
99.6% QoQ
We expect Hansol LCD to report a 35.1% QoQ rise in sales (W377.3bn) Performance
and 99.6% QoQ jump in operating profit (W5.9bn) for 2Q10. Such Price Close Relative to .KS11 (RHS)
65,000 303
upbeat 2Q10 earnings, should they be realized, would be due mainly a 60,000 278
55,000
surge in LED BLU portion in total BLU shipments from 35% in 1Q10 to 253
50,000 228
59.4% in 2Q10. We raised our FY10 full-year sales estimate for the 45,000 203
40,000 178
company by 15%, to roughly W1.5tr, as LED BLU is forecast to 35,000 153
represent over 50% of Hansol’s total BLU output in FY10. Meanwhile, 30,000 128
25,000 103
we lowered our FY10 operating profit forecast for Hansol to W22bn, to 20,000 78
reflect cost hikes on the increased sales proportion of LED BLU. 15,000 53
Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10
See the last page of this report for important disclosures Source for data: Company, Bloomberg, Mirae Asset Research
14
Jubi Park, Handset Analyst, 82 2 3774 1938 jubi.park@miraeasset.com Hansol LCD 16 July 2010
004710 KS
on growing 3D TV demand should neutralize the overall fall in ASP. We project LED BLU sales
will total W955.3bn in FY10 and account for 64% of the company’s FY10 full-year sales.
Be f o r e Afte r
(KRW bn, %) 2Q10E 2Q10E Diff (%, %p) 1Q10 QoQ (%,%p) 2Q09 YoY (%, %p)
(KRW bn) 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10E 3Q10E 4Q10E
15
Jubi Park, Handset Analyst, 82 2 3774 1938 jubi.park@miraeasset.com Hansol LCD 16 July 2010
004710 KS
Op EBITDA 30 20 31 46 54
Depreciation (11) (9) (9) (11) (12)
Amortisation - - - - -
Op EBIT 19 11 22 35 42
Net interest (1) (0) (0) (0) (0)
Associates and JCEs 1 18 16 16 15
Other income (10) (5) 2 4 6
Net exceptional income - - - - -
Profit before tax 10 23 40 54 63
Tax (3) (2) (4) (8) (9)
Post-tax profit 6 21 36 46 53
Minorities - - - - -
Preferred dividends
Net income 6 21 36 46 53
Norm profit 6 21 36 46 53
Dividends (2) (2) - (2) (2)
Retained earnings 5 20 36 44 52
S ource: C ompany data, M irae A sset Research estimates
Cashflow
Op EBITDA 30 20 31 46 54
Decrease in working capital 19 (5) (14) 5 (31)
Other operating cashflow 0 (11) (18) (15) (8)
Operating cashflow 50 3 (2) 36 15
Tax paid (3) (2) (4) (8) (9)
Net interest (1) (0) (0) (0) (0)
Dividends received 1 18 16 16 15
Cashflow 47 19 9 44 20
Capital expenditure (4) (3) (36) (27) (9)
Net acquisitions - - - - -
Net investments (18) 5 (8) 5 3
Other investing cashflow (0) (0) 5 4 1
Investing cashflow (22) 2 (39) (19) (5)
Dividends paid 2 2 - 2 2
Increase in equity - - 5 - -
Increase in debt (15) (6) 2 - -
Other financing cashflow 2 (13) 41 (2) (3)
Financing cash flow (11) (17) 47 (0) (1)
Beginning cash 0 13 17 33 57
Total cash generated 13 4 16 24 13
Forex effects
Ending cash 13 17 33 57 70
S ource: C ompany data, M irae A sset Research estimates
16
Jubi Park, Handset Analyst, 82 2 3774 1938 jubi.park@miraeasset.com Hansol LCD 16 July 2010
004710 KS
Balance Sheet
Key Ratios
17
Soon-Hak Lee, Handset Analyst, 82 2 3774 1651 shlee79@miraeasset.com Korea/Display 15 July 2010
Jubi Park, Small-cap Analyst, 82 2 3774 1938 jubi.park@miraeasset.com
After graduating from Hanyang University with BA in Electronic & Electrical Engineering,
Soonhak worked at Samsung Electronics in handset technology planning for 5 years. He joined
Mirae Asset Securities as handset analyst in January 2010. Soonhak is currently covering +82 2-3774-1651/ 10-3090-6846
Korean handset industry and component sectors. shlee79@miraeasset.com
Jubi Park
SMALL-CAP ANALYST
After earning an MBA degree at Seoul National University, Jubi joined Mirae Asset in Korea in
2009 to assist the technology research. Jubi is also a graduate of The University of California,
Los Angeles, majoring in business economics and has previously worked with the audit +822-3774-8940/ 10-7185-8940
department of BDO Daejoo Accounting Corporation as an AICPA for two years. jubi.park@miraeasset.com
18
Soon-Hak Lee, Handset Analyst, 82 2 3774 1651 shlee79@miraeasset.com Korea/Display 15 July 2010
Jubi Park, Small-cap Analyst, 82 2 3774 1938 jubi.park@miraeasset.com
Recommendations
By stock (12 months) By industry
Buy: A target price + 10% or more above the current price, Overweight: over +10% of the current industry index
Hold: Target price within - 10% to +10% of the current price Neutral: -10% to +10% of the current industry index
Reduce: A target price of –10% or less below the current price Underweight: -10% or less than the current industry index
Compliance Notice
This report is distributed to our clients only, and none of the report material may be copied or distributed to any other party. While Mirae Asset
Securities have taken all reasonable care to ensure its reliability, we do not guarantee that it is accurate or complete. Therefore, Mirae Asset
Securities shall not be liable for any result from the use of this report. This report has never been provided to any institutional investor or third
party. This report has been prepared without any undue external influence or interference, and accurately reflects the personal views of the
analyst on the company herein.
[Analyst: Soon-Hak Lee] [Analyst: Jubi Park]
Securities Held by the Analyst Holdings of Participation Involvement
Number of Purchase Purchase share of in Issuance with Treasury Stock Held
Stock Analyst Type over 1% of Securities Affiliates
Shares Price Date
N/A
Stock Price & Target Price Trend Stock Price Target Price Lumens (380600.KS)
■ Buy ■ Hold ■ Reduce Not Rated Previously ■ Strong Buy ■ Buy® ■ Mkt.Perm ■ Und.Perm Date Recommendation 12-Month Target Price (W)
13/04/2010 BUY (Initiate) 15,000
11/05/2010 BUY 18,000 (Up)
07/14/2010 BUY 18,000
Stock Price & Target Price Trend Stock Price Target Price Hansol LCD (004710.KS)
■ Buy ■ Hold ■ Reduce Not Rated Previously ■ Strong Buy ■ Buy® ■ Mkt.Perm ■ Und.Perm Date Recommendation 12-Month Target Price (W)
05/20/2008 BUY 50,000
<Changes in Analyst>
05/19/2010 BUY (Re-initiate) 80,000
07/14/2010 BUY 80,000
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Soon-Hak Lee, Handset Analyst, 82 2 3774 1651 shlee79@miraeasset.com Korea/Display 15 July 2010
Jubi Park, Small-cap Analyst, 82 2 3774 1938 jubi.park@miraeasset.com
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