South Korea has a large presence in the entertainment industry. But it’s not exactly the first country which comes to an investor’s mind when buying stocks.
However, even when investors have their sights set on one of Korea’s two stock exchanges, Korea Exchange (KRX) and KOSDAQ Stock Market (KOSDAQ), circuit board manufacturers would probably not be on anyone’s mind.
This is why InvestAsian believes that Leeno Industrial Inc. deserves your attention. But first of all, why invest in Korea?
With the global economy stabilizing and markets recovering, Korea already regained everything they lost and more. Korean stock markets recently 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. It’s one of East Asia’s most dynamic economies and we think they will even outgrow Japan over the long-term.
The Circuit Board Manufacturers
When most people talk about tech stocks, they’re focused on firms which have their emblem on the product itself. Apple, Samsung, and Sony are great examples of these well-recognized brands.
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. 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 testing most electronic goods.
Leeno is involved in every stage of its manufacturing process from the design to assembly to final inspection. They’re known for 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 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 grow in the future with a current ratio of 7. They also have no debt at all, meaning the company can expand aggressively should they choose.
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 an impressive performance which has left its shareholders satisfied.
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. Some brokerages outside of Korea, like those in Hong Kong, also allow you to trade on the Korean stock exchanges.
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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