Camera module industry expected to do well this year, thanks to multi-camera effect

Despite the slowdown in smartphone sales, the camera module industry earnings outlook for the year is positive.

Major smartphone camera makers such as Partron, Power Logics, MCNEX and Cammsys are expected to see improved performance as smartphones equipped with multi-cameras are increasing. Some companies that were negatively affected by the sluggish smartphone sales of Samsung Electronics’ flagship smartphones in 2Q last year are expected to once again show the strong growth that had appeared in the second half of last year.

Partron’s sales this year are expected to rise by 20.2% year-on-year to 949.3 billion won, according to the reports by securities sources on 11th. The operating profit rose 94.6% to 54.1 billion won. In the second quarter of last year, Partron recorded an operating loss of 3.7 billion when it was directly hit by the sluggish sales of Samsung flagship smartphones. However, in the fourth quarter of last year, the company recorded sales of 203bn won and the operating profit of 12b won, meaning that the earlier quarters’ performance decrease has been somewhat recovered. Park Won-Jae, a researcher at Mirae Asset Daewoo, said, “The adoption of dual cameras in the Samsung Electronics’ low-cost model is increasing, which contributes to the expectation for better earnings.”

The securities sector is expecting Power Logics’ sales this year to increase 19.0% from last year to 874.3 billion won. Recently, the company supplied a multi-camera module for flagship and low-end products. It is expected that the company will renew the quarterly record highs recorded in the fourth quarter of last year. The operating margin of Power Logics had been improved steadily last year. In the first quarter of 2018, the operating margin was only 2.2%; however, it is expected to rise to 4.9% in the fourth quarter.

MCNEX is expected to benefit from the Indian market. Kim Sang-Pyo, a researcher at Kiwoom Securities, said, “The initial reaction to the low-end smartphones M10 and M20, which are aimed at the Indian market, is explosive and will have a positive impact on MCNEX’s earnings improvement in the first half of the year.” M10 and M20 are equipped with the MCNEX camera module. The orders for premium smartphone front and rear modules and low-end rear modules are also among the materials that boost the earning expectations. Researcher Kim said that the sales of MCNEX will increase by 22.8% to 852.4 billion won and the operating profit to increase by 45.5% to 51.5 billion won.

Cammsys also expects its sales to reach 628.3 billion won, up 23.2% from the previous year and operating profit 22.2% to 22 billion won. Experts have explained that the company’s camera division is growing steadily.