With the country’s large presence in the entertainment industry, South Korea is definitely not the first country that comes to an investor’s mind when it comes to 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 probably not be on anyone’s mind as long as the major Korean multinationals such as Samsung and LG are around.
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).
However, as the Korean economy picks up again, with a significant expected increase in the number of tourists visiting the country and strong business ties with China, InvestAsian believes that this is a prime time to look at Korea as it is one of the markets making one of the most robust recoveries in Asia.
The Circuit Board Manufacturers
Most general talks about technology revolve around the finished product itself, with most discussions focused on corporations that have their emblem on the product itself such as LG, Apple, and Sony.
Few people talk about the manufacturing of the hardware involved in the assembly of the finished product. An essential part of any current piece of technology now is the circuit boards. If any piece of technology would be 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.
Leeno Industrial Inc.
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 Industrial Inc. 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 is in an extremely secure place to grow into the future with a current ratio of 7 and having no debt at all. This means that the company is able to take on considerable debt if it should choose 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 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 this stock is often 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 would have to set up a trading account through a securities company or asset management firm such as Samsung Securities or Mirae Asset. Some brokerages outside of Korea also allow you to trade on the Korean stock exchange.