AMO Group's Think Tank
The authors are analysts of Shinhan Investment Corp. They can be reached at hyungwou@shinhan.com and michlshim94@shinhan.com, respectively. -- Ed.
AMO Group's think tank
Amosense, a subsidiary of electronics parts maker Amotech, was listed on the KOSDAQ market in 2021. The company develops and manufactures high-tech components and modules, with shielding sheets accounting for 48% of sales as of 1Q22, wireless charging modules 20%, automotive electronics parts and RF modules 14%, IoT devices 7%, and lighting modules 6%. Most of the wireless charging modules and shielding sheets produced by Amosense are supplied to parent Amotech for use in antenna modules.
2022 outlook: Earnings to turn around despite weak tech demand
For 2022, sales are forecast at KRW70.1bn (+23% YoY) and operating profit at KRW2.9bn (positive swing YoY). Despite production cutbacks at client companies and slowing demand for tech products as a whole, we expect Amosense's earnings to improve on a YoY basis for the following reasons.
First, the company stands to see an increase in the supply of parts for ultra-wideband (UWB) applications. The relatively new wireless communication protocol offers better positioning accuracy and security compared to Bluetooth, and the market for UWB-enabled devices is set to take off this year on the easing of chip shortages.
Second, auto sector adoption of UWB technology is also expected to expand in the near term. Amosense along with Murata Manufacturing and Sunway are emerging as the global suppliers expected to secure orders for UWB modules for use in automotive electronics parts.
Third, Amosense is well-positioned to benefit from growing adoption of shielding sheets in new applications. The use of shielding sheets is now starting to expand from wireless chargers to foldable devices, digital pens, and electric vehicles.
Technological strengths in communication modules & components
The importance of communication parts is rising alongside technological advancements such as IoT, 5G, and self-driving cars. Amosense is one of the few parts makers in the domestic market with technological strengths in communication modules and components/materials. The company has partnered with a global chipmaker for development of UWD modules, and is technically advanced vs. peers in the production of electromagnetic shielding sheets. We urge investors to look beyond current sales levels to the boost in earnings expected from new products under development with partner companies at home and abroad.