Smartphone Parts Manufacturers

The stock prices of companies that supply parts for Samsung smartphones are highly likely to rebound by the end of this year.
The stock prices of companies that supply parts for Samsung smartphones are highly likely to rebound by the end of this year.

 

The stock prices of smartphone parts suppliers are showing signs of a rebound before the launch of the Samsung Galaxy S5, which is scheduled for early next year. Experts are forecasting that among companies that make parts for Samsung smartphones, the stocks of Samsung Electro-Mechanics, Partron, and JAHWA Electronics are highly likely to remain strong until the end of this year. They also predict that flexible smartphones will be showcased after the release of the Galaxy S5. On top of that, they advise that investors should pay attention to the stocks of manufacturers that supply parts for Samsung smartphones. 

According to the Korea Exchange on November 29, stock prices for smartphone case maker Shinyang Company plunged by 78.22% from 20,250 won (US$19.58) per share early this year. Touchscreen panel manufacturers MELFAS (65.86%) and DigiTechSystems (51.10%), Flexible Printed Circuit Board makers Interflex (55.76%) and Flexcom (51.99%), and High Density Interconnect Printed Circuit Board maker Korea Circuit (41.55%) saw their share price falling by a little more or less than a fifth. 

Hong Seung-pyo, a researcher at Samsung Securities, said, “The sales of high-end smartphones like the Galaxy S4 fell short of expectations, which had a huge impact on the stock price of smartphone suppliers.” He added, “Samsung released smartphones in mid and lower range price segments because of a reduction in sales of high-end smartphones, leaving suppliers a small margin. In addition, suppliers themselves excessively increased their production based on the expectation of a sharp rise in demand, which resulted in a hike in depreciation costs. At the end of the day, increased depreciation costs negatively affected results for the third quarter. Those are the reasons why the share price of smartphone suppliers was cut in half.”

Cho U-hyeong, a researcher at KDB Daewoo Securities, predicted, “It is highly likely that the stock price of companies that supply parts for Samsung smartphones will rebound by the end of this year owing to growing expectations about the introduction of the Galaxy S5 early next year.” However, a big rebound is not expected this time, due to higher consumer expectations about new technologies. 

Among manufacturers that supply parts for Samsung smartphones, Samsung Electro-Mechanics, LG Innotek, and Hansol Technics were named as companies with the prospect of an increase in the value of their stock when flexible and wearable smartphone markets grow in the future. 

Baek Jong-seok, a researcher at Hyundai Securities, pointed out, “Flexible smartphones other than the current curved ones ought to be launched in order to satisfy consumer expectations of flexible displays. And an advance in wireless charging technologies is essential to increase the demand for wearable smartphones.” He concluded by saying, “Wireless charging technologies are important because consumers do not consider glasses or watches to be products that use rechargeable batteries. Samsung Electro-Mechanics, LG Innotek, and Hansol Technics are currently developing related technologies.”

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