20171115-三星证券-Set_to_enjoy_order_momentum_in_1H18_6页_1mb

SFA Engineering (056190) - Company Update (2017.11.15)

Core Content

SFA Engineering is a company that has shown positive performance in its third quarter of 2017, with a strong outlook for the first half of 2018. The report highlights the company's financial results, future forecasts, and valuation metrics, as well as its investment rating.

Key Highlights

3Q17 Results

• Consolidated Sales: KRW458.2 billion (up 43.1% y-y, down 20.3% q-q)
• Operating Profit: KRW62.6 billion (up 111.8% y-y, down 19.9% q-q)
• Operating Margin: 13.7% (post-4Q14 high)
• Parent-Based Sales: KRW316.8 billion
• Parent-Based Operating Profit: KRW52.6 billion
• Parent-Based Operating Margin: 16.6% (post-4Q12 high)

Performance vs. Market

• 1M: 14.1% (vs. Kosdaq: 0.0%)
• 6M: 5.2% (vs. Kosdaq: -10.5%)
• 12M: 64.8% (vs. Kosdaq: 35.3%)

Key Changes

• Recommendation: Maintained as BUY
• Target Price: Revised to KRW53,000 (+17.8%)
• 2017E EPS: KRW4,242 (+2.8% from previous estimate)
• 2018E EPS: KRW4,176 (-0.3% from previous estimate)

SAMSUNG vs THE STREET

• No of Estimates: 6
• Target Price: KRW49,833
• Recommendation: 3.8 (BUY★★★:5, BUY:4, HOLD:3, SELL:2, SELL★★★:1)

Full-Year Forecast Revisions

Target-Price Calculation

Valuation Summary

Income Statement (KRWb)

Cash Flow Statement (KRWb)

Balance Sheet (KRWb)

Financial Ratios

Investment Rating

• BUY: Expected to increase in value by 10% or more within 12 months and is highly attractive within the sector
• HOLD: Expected to increase/decrease in value by less than 10% within 12 months
• SELL: Expected to decrease in value by 10% or more within 12 months

Summary of Investment Outlook

• The company is expected to benefit from order momentum in 1H18, driven by increases in orders for clean logistics, module equipment, evaporators, and general logistics.
• The parent company had KRW797.3 billion in backlogged orders at the end of 3Q17.
• The report recommends maintaining a BUY rating, with a target price of KRW53,000, indicating a 13.9% upside from the current price of KRW46,550.
• The analyst notes that although 4Q results may weaken, this is due to past orders and is unlikely to significantly impact investor sentiment.
• Investors should monitor order momentum from Samsung Display's new fab and changes in orders from Chinese panel makers.

Compliance Notice

• The report is for informational purposes only and does not constitute an offer or solicitation.
• No individual or entity is liable for any loss or damage arising from the use of this report.
• Information is based on publicly available data and may change without notice.
• The report is not intended for all investors and should not be relied upon for individual investment decisions.
• All information is subject to change and may not be accurate or complete.
• The report is not a complete statement or summary of the securities or markets discussed.
• Samsung Securities disclaims all responsibility or liability for any loss or damage resulting from the use of the report.