Last updated November 16th, 2018.

 

South Korea boasts a large presence in the global entertainment industry. But it’s not exactly the first country that comes to an investor’s mind when buying stocks.

Indeed, even when stock traders have their sights set on one of Korea’s two exchanges, Korea Exchange (KRX) and KOSDAQ Stock Market (KOSDAQ), circuit board manufacturers probably wouldn’t be on anyone’s mind.

That’s why InvestAsian thinks Leeno Industrial Inc. deserves your attention. But first of all, why should you buy Korean stocks in the first place?

With the world economy now stabilizing and markets recovering, South Korea was among the first countries to recover everything they lost during the 2008 Financial Crisis.

Korean stock markets especially suffered a sharp decrease back then since an untimely outbreak of Middle East Respiratory Syndrome (MERS) was combined with several economic factors.

Nonetheless, it’s a great time to consider investing in South Korea stocks as the nation’s already robust economy picks up steam once again.

South Korea truly is one of East Asia’s most dynamic economies. In fact, we believe they will even outgrow Japan over the longer term.

 

The Circuit Board Manufacturers

When most people talk about tech stocks, they’re focused on firms that have their emblem on the product itself. Apple, Samsung, and Sony are great examples of these well-recognized brands.

However, few people think about the companies that are creating components for them. Less people yet mention the businesses testing products and providing services to manufacturers.

Circuit boards are a very crucial part of any electronic. If compared to a biological organism, it would represent the physical brain itself.

Great advances are now being made in circuit boards, turning them into smaller yet more powerful components. Leeno Industrial Inc. (KOSDAQ:058470) is one of the leading Korean companies in this field.

Established in 1978, Leeno specializes in making critical testing components for IC production, along with testing and analysis. Leeno’s proprietary products, Leeno Spring Test Probes and IC test sockets, are crucial in testing electronic goods.

Leeno is involved in every stage of its manufacturing process from the design, to assembly and final inspection. They’re known for providing on-time delivery, one of the fastest lead times in the market, and have an extensive global distribution network.

 

Leeno Stock: A Strong Performer

InvestAsian believes Leeno stock is a strong buy at the moment because of these following reasons.

On the sales side, the company recently began outperforming the sector in terms of sales growth and gross profit margins. Net profit margin is even more impressive – it’s been over 200% the sector’s average for the past half decade.

Leeno stock is in a secure place to continue growing well into the future with a current ratio of 7. They also have absolutely no debt at all , meaning the company can expand aggressively should they choose.

The company’s shareholders saw Leeno’s ROI and ROE average 20% annual gains for the past 5 years. Furthermore, a low P/E ratio of 15.55 and a net profit margin of over a third its sales mean the stock is both fairly valued and primed for growth.

Technical analysis reveals the firm’s share price is usually at its lowest around year end. Leeno stock is cyclical, possibly because of strong demand for electronics around the holiday season.

Foreign investors wanting to invest in the Korean stock market must set up a trading account through a firm such as Samsung Securities or Mirae Asset.

A few brokerage firms that are based outside of Korea, like some in Hong Kong, will let you trade on Korean stock exchanges too.

Interested in buying Korean stocks? You may want to see our analysis of Samjin – a pharma company widely unknown outside of South Korea.

 

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About Reid Kirchenbauer

Reid Kirchenbauer is the Founder of InvestAsian. He's an accomplished stock trader and property investor in Thailand, Cambodia, and many other places. He's been featured in publications such as Forbes, Nomad Capitalist, Property Report, and Seeking Alpha. Download his free investment guide by clicking here.

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