Korea’s Only Interchangeable Lens Player with Global Presence
The author is an analyst of NH Investment & Securities. He can be reached at
esshim@nhqv.com. -- Ed.
Samyang Optics is a maker of third-party interchangeable lenses used in DSLR and mirrorless cameras. The interchangeable lens market is set for rejuvenation on a rise in outdoor activity, a rebound in the film industry amid a transition of Covid-19 from pandemic to endemic, and climbing demand for high-quality videos. Additional high growth is expected on the entry into new businesses—industrial thermal imaging and machine vision lenses.
Korea’s only interchangeable lens player with global presence
Having successfully positioned itself in the Manual Focus (MF) product market, Samyang Optics is expanding its business by launching lenses for film shooting and Auto Focus (AF) products. The interchangeable lens market is dominated by just a handful of companies due to a lofty technological entry barrier—major competitors include Carl Zeiss (MF products, Germany), Sigma, and Tamron (AF products, Japan). Samyang Optics sells its products to over 70 countries around the world, focusing in particular on the US and Europe.
To benefit from endemic transition and film industry growth, penetrate into AF market, and enjoy fruits of new businesses
Although demand for low/mid-end cameras in the interchangeable lens market is falling due to the high specification standards of smartphone cameras, demand for high-end products for film shooting and professional use remains stable. While the interchangeable lens market and the firm’s earnings have been dampened by the impacts of Covid-19, the interchangeable lens market is expected to resume growth on an uptick in outdoor activity amid the endemic transition, a film industry recovery, and rising demand for high-quality video for OTTs and YouTube. The company foresees robust earnings growth on its continued efforts for penetration into the AF market and its entries into the industrial thermal imaging camera and machine vision lens markets.
Samyang Optics is continuing its shareholder-friendly dividend policy, buttressed by its stable cash flow, zero-leverage policy, and business model characteristics that do not require large facility investment. DY is expected to be hefty this year, when earnings growth should begin in earnest.
Despite a recent share price jump, the firm’s valuations remain undemanding at a 2022E P/E of 9.9x. Earnings growth is anticipated amid a positive business environment, and if new business results materialize, strong margins and healthy dividend payouts are to be witnessed.