With the country’s large presence in the entertainment industry, South Korea is not the first country which comes to an investor’s mind when buying stocks.
However, even when most investors would have had their sights set on one of Korea’s two stock exchanges, Korea Exchange (KRX) and KOSDAQ Stock Market (KOSDAQ), circuit board manufacturers would most likely not be on anyone’s mind.
This is why InvestAsian believes that Leeno Industrial Inc. needs to be brought to your attention.
But first of all, why Korea?
With the global economy stabilizing and many markets recovering, Korea has proven itself to regain what it had lost and much more. Earlier this year, the Korean stock markets suffered a sharp decrease due to the outbreak of the Middle East Respiratory Syndrome (MERS).
But as the Korean economy picks up again, InvestAsian believes this is a prime time to look at Korea – one most robust economies in Asia.
The Circuit Board Manufacturers
When most people talk about tech stocks, they’re focused on companies which have their emblem on the product itself such as Apple, Samsung, or Sony.
But few people talk about the companies creating the components for these companies. Even fewer still mention the companies which test products and provide services to manufacturers.
Circuit boards are a crucial part of any technology. If compared to an organism, this part represents the physical brain itself. There are great advances being made in circuit boards, turning them into smaller yet more powerful components, and Leeno Industrial Inc. (KOSDAQ:058470) is one of the leading Korean companies in this field.
Established in 1978, Leeno specializes in the making of critical testing components for IC production, test and analysis. Leeno’s proprietary products, Leeno Spring Test Probes and IC test sockets, are crucial in the testing process of most electronic products.
Leeno is involved in every stage of its manufacturing process from the design to assembly to final inspection, consistently keeping its customers satisfied by providing on-time delivery, one of the fastest lead times in the market, and an extensive distribution network across the world.
A Strong Performer
InvestAsian believes that Leeno stock is a strong buy at this moment because of the following reasons.
On the sales side, the company has recently started outperforming (with no indications of stopping) the sector in terms of sales growth and gross profit margins with 2015 sales forecast at a 15.9% increase from the previous year. Net profit margin is even more impressive and has been over 200% the sector’s average for the past half decade.
Leeno stock is in a secure place to grow in the future with a current ratio of 7 and having no debt at all. This means the company has the means to expand aggressively.
The company’s shareholders are in for a treat as well. With its ROI and ROE averaging 20% for the last 5 years, a decent P/E ratio of 20.55, an 18% growth in EPS, and a net profit margin of over a third of its sales, Leeno stock boasts a very impressive performance that has left its shareholders more than satisfied.
Analysis of the stock price for the past 2 years also reveals that Leeno is usually at its lowest during the year’s end with prices rising about 40% from the period of November to July.
For foreign investors who want to start investing in the Korean stock market, you will need to set up a trading account through a firm such as Samsung Securities or Mirae Asset. Some brokerages outside of Korea also allow you to trade on the Korean stock exchange.
Interested in Korean stocks? You may also want to see our analysis of Samjin – a pharmaceutical company widely unknown outside Korea.
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