Seoul Semiconductor, a major player in the Micro LED industry, has managed to turn its losses into profits. The company’s fourth-quarter report from last year shows that while it continued to face losses, it expects profitability to improve in the second half of this year. However, critics have pointed out that, in addition to maximizing the growth potential of its existing business, Seoul Semiconductor needs to identify new growth engines. On February 17, Daishin Securities maintained its “Market Perform” investment rating and set a target stock price of 10,000 KRW (~$7.50).
2024 Q4 Performance and Revenue Decline
In the fourth quarter of last year, Seoul Semiconductor’s sales reached 2.648 trillion KRW (~$1.986 billion), representing a slight decline of 0.8% compared to the same period last year. The company posted an operating loss of 21 billion KRW (~$15.75 million), continuing the downward trend in operating profit compared to the previous year. However, the operating loss was less than anticipated, which had been forecasted at 41 billion KRW (~$30.75 million). Despite the downturn, Seoul Semiconductor managed to achieve a profit in both the second and third quarters of last year, only to fall back into the red in Q4.
Lackluster Outlook for Q1 2025
Looking ahead, Seoul Semiconductor’s outlook for early 2025 is not particularly optimistic. The first quarter, traditionally a weak period, has been impacted by slow sales in televisions, monitors, and lighting, which in turn has led to higher fixed costs. In the previous quarter, sales in the lighting segment accounted for 21.3% of the total revenue, IT (TVs, monitors, etc.) contributed 41%, and automotive electronics made up 25.6%. While the positive growth in Q4 sales has been acknowledged, the slowdown in demand for LED TVs and lighting has raised concerns.
Daishin Securities analyst Park Kang-ho remarked, “In the first quarter of 2025, we expect the seasonal downturn and sluggish sales in sectors like IT and lighting to further increase fixed costs. Whether the company can develop new growth engines will be crucial for its future.”
Positive Long-term Outlook
Despite the current challenges, Seoul Semiconductor’s overall performance for the year showed positive signs. The company’s total revenue grew by 5.9% in 2024, reaching 19 trillion KRW (~$14.25 billion), and it managed to turn an operating loss into a profit of 22 billion KRW (~$16.5 million). For 2025, Seoul Semiconductor projects a 1.4% increase in revenue and a significant 332% jump in operating profit, predicting 11 trillion KRW (~$8.25 billion) in revenue and 9.5 billion KRW (~$7.125 million) in operating profit. As a result, the second half of the year is expected to show improved sales and profitability compared to the first half.
Daishin Securities pointed out, “In the short term, we expect the Chinese ‘trade-in’ policy to have a positive impact. In the medium to long term, we anticipate an increase in sales in the Micro LED sector, and we expect sales and profits in the second half of the year to outperform the first half.”
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