Doosan

Doosan Corporation Electro-Materials (DSE), a holding company of Doosan Corporation, has attracting a great deal of attention from institutional investors as the prices of DSE stocks are appreciating with the growth in sales of Samsung's Galaxy S3. The sales of flexible copper clad laminates (FCCL) have increased significantly in line with the rising use of smart devices.

According to an announcement by the Korea Exchange on June 20, institutional investors’ net purchase of 63,928 shares of Doosan stocks, investing 20.9 billion won from the 5th to 19th of June.

The keen interest of institutional investors is due to the anticipated future growth of DSE based on the release of the Samsung Galaxy S3.

“DSE is expanding its sales of high-margin products like FCCL, package CCL, and MCCL,” announced Dongyang Kim, an analyst of Woori Investment & Securities, adding, “Accelerating sales of the Galaxy S3 and the release of the Galaxy Note2 of Samsung, a major customer of FCCL, is positive.”

According to a representative of HSBC Stock, “The earnings of DSE are expected to improve continuously on the back of increased smartphone shipments including Samsung’s Galaxy S3, while the increasing sales ratio of high-margin FCCL is a particularly positive development.”

With the increase in FCCL sales due to the boom of upstream industries such as smartphones and tablet PCs, Woori Investment & Securities forecast the continued growth of DSE with sales of 202.4 billion won and sales profit of 21.3 billion won in the second quarter, representing an increase of 10% and 31% respectively compared to the same quarter of the previous year.

With future development of smart devices, the performance of DSE looks set to further improve. HSBC Stock has predicted that the sales of FCCL will increase by up to 27%, and up to 30% in the following year by expanding the three production lines.

“Sales growth and profitability improvements can be maintained in the second half by expanding the FCC line that is currently under construction,” said analyst Kim.

Officials from Doosan also predicted that the steady growth of the high-end CCL market will continue due to the high performance, convergence, and eco-friendliness of state-of-the-art digital products like mobile phones, LCDs, and communication equipment despite the usual business cycle of boom and recession.

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Source: The Korea Economic Daily