Sanil Electric Achieves Record Quarterly Operating Profit, Operating Margin Reaches 38.7% | Cha Young-ju, Director of Wise Economic Research Institute
산일전기, 분기 최고 영업이익 달성, 영업이익률도 38.7% 달성 | 차영주 와이즈경제연구소 소장 [집중 오늘의 주식]
Speakers
Cha Young-joo
— Director, Wise Economic Research Institute
Summary
Cha Young-ju reviews recent Q4 earnings reports and analyst notes for AmorePacific, Sanil Electric, Daehan Electric Wire, GS E&C, and ISC. He highlights AmorePacific's China restructuring, Sanil Electric's record margin and data-center-driven growth, Daehan's cable growth versus thin margins, GS E&C's profitability focus, and ISC's AI-related test-socket gains. He also cautions that the market is reacting sensitively to good news and that some stocks, including AmorePacific, look short-term overheated.
- The speaker reviews Q4 reports for AmorePacific, Sanil Electric, Daehan Electric Wire, GS E&C, and ISC.
- AmorePacific's China restructuring turned operating profit positive, though the stock looks short-term overheated.
- Sanil Electric posted record operating profit and a 38.7% margin, with data-center and renewable sales growing.
- Daehan Electric Wire benefits from submarine cable growth and copper-linked pricing, but margins are thin and valuation is high.
- GS E&C is prioritizing profitability over volume, with overseas plant cost overruns still a risk.
- ISC beat consensus on AI-related test socket demand and mass-production share gains.
- The speaker warns that Korean equities may be overreacting to good news and that late earnings reporters could add volatility.
Ideas
China restructuring drives AmorePacific profit turnaround.
AmorePacific's Q4 results confirmed that its China restructuring is paying off: China sales fell about 15% year over year, but operating profit turned positive as loss-making offline and duty-free stores were reduced. The domestic operating loss was due to one-off voluntary retirement costs and should not be over-weighted. COSRX's turnaround, strong Laneige and Aestura growth in the US and Europe, and a better product mix lifted profitability, while traditional channels also grew, and management guided to a mid-20% operating margin. Hyundai Motor Securities raised its target to KRW 170,000 by increasing 12-month forward EPS rather than the target PER, though the speaker cautioned that the stock looks slightly overheated after its sharp rally.
Record margin; data-center sales drive Sanil Electric.
Sanil Electric reported record quarterly operating profit with a 38.7% operating margin, helped by renewable/ESS and data-center sales growth of 130% year over year. The speaker argues the long-term outlook for transmission and transformer demand remains intact, orders should recover in the second half of 2026 after customer inventory adjustments, and higher data-center sales plus super-high-voltage specialty transformer production should support margins. Its valuation discount to large power-equipment peers should narrow given superior profitability and order competitiveness; Shinhan Securities maintained a KRW 180,000 target, using a 29x target PER versus a 31x large-cap peer average. The speaker also highlights a stable dividend payout near 15% and ROE approaching 30%.
Cable story, but thin margins, high PER.
Daehan Electric Wire is seeing high-voltage submarine cable sales rise and profitability improve, and SK Securities raised its target to KRW 35,000 based on 2026 revenue and operating profit forecasts and an EV/EBITDA valuation. Copper price increases are not a major risk because cable contracts are fixed-price and new orders can reflect higher copper, while the materials business has selling prices linked to copper. However, operating margin is only about 4%, ROE is low, and the stock's PER is high, so the narrative is better than current earnings power and the shares remain vulnerable to cost or wage shocks.
GS E&C prioritizes profit over volume.
GS E&C's Q4 results showed process-level margin improvement and a shift from volume expansion to profitability. Although 2026 revenue is expected to shrink after reduced new housing sales since 2023, operating profit is forecast to grow sharply, with the report estimating about 19% growth excluding GS Inima, helped by stabilized housing margins, a 10% housing gross margin, and additional gains from redevelopment/rebuilding projects. The 2026 plan targets KRW 17tn in new orders, KRW 11tn in revenue, and 14,000 new housing units. Overseas plant cost overruns, including the GS Inima desalination project, remain a risk.
ISC gains AI test-socket share.
ISC beat Q4 consensus with revenue of KRW 72.3bn, up 84% year over year, and operating profit of KRW 21.9bn, a 30% operating margin, even in a seasonally weak quarter. The beat was driven by expanded non-memory mass-production test sockets and higher hyperscaler volumes. ISC is cutting costs, reducing low-value products, shifting from R&D to mass-production sockets and toward higher-value SLT sockets, and expanding its customer base. Additional capex, Vietnam phase 2, and expected first-half equipment orders from customer capex should support growth. Meritz Securities rates it Buy with a KRW 200,000 target, based on 2026 EPS and a global average PER of 49x. Mass-production socket share gains are the key to capturing AI growth.
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This 3PRO TV (삼프로TV) video, published February 09, 2026, features Cha Young-joo discussing 090430.KS, 062040.KS, 001440.KS, 006360.KS, 095340.KQ. 5 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Cha Young-joo · Tickers: 090430.KS, 062040.KS, 001440.KS, 006360.KS, 095340.KQ