Analyst JunSeok Lee

[Fine M-tec] The Big Shortage: The Supply Gap China Can’t Fill Rating: N.R Target Price : - Current Price(09/04): 9,220 Won Upside : - 2Q26 Review: Results Prove Out Ahead of the Story Fine M-Tech's 2Q26 consolidated revenue reached KRW95.21bn (+24.4% YoY), with OP of KRW7.33bn (+38.6% YoY). Simultaneous entry into the Samsung and Apple foldable cycles, plus stabilizing yields on the new process, drove growth and margin expansion together. By segment (pre-elimination): foldable backplates KRW73.2bn, secondary battery/smart components KRW21.0bn, other KRW15.5bn. 2Q R&D rose to KRW5.2bn (+65.1% vs. trailing 4Q avg. of KRW3.15bn), yet profitability still improved — reflecting pre-emptive spend to stabilize mass production of the next-gen backplate process and composite lamination tech for 2H new foldables. Into 2H, rising foldable shipments at key customers plus further yield gains should steepen the earnings trajectory. Fine M-Tech Fills the Void Left by China Seven years after Samsung's first foldable, the industry's second door is opening. Apple is set to unveil its first foldable iPhone on Sep. 9 (local time), with component volumes ramping meaningfully from 2H — a structural inflection point as Apple becomes a new demand source for the Company. Fine M-Tech has been an Apple-foldable name for three years without earnings to show for it — but having commercialized the world's first foldable backplate and shipped 55mn cumulative units, the Company has now proven its tech and mass-production capability. Assuming 8mn initial Apple shipments, we estimate ~9.6mn units of backplate demand and a ~KRW290bn market. We expect the Company to capture 50%+ share; competitor LYI Tech looks unable to fully absorb initial demand, raising odds of upside to our base case. Additional allocation could add KRW200bn+ to 2H Apple-related revenue alone, leaving further upside on the table. In short, this is not an incremental customer win but a new growth axis capable of re-rating the Company's earnings scale in one step. When a Theme Turns Into Numbers The wait is over. With Apple demand layering onto a Samsung foldable recovery, the earnings trajectory shifts decisively. Strong Galaxy Z8 sell-through and a richer mix of premium laser-processed products should lift both backplate volumes and profitability, with Apple volume flowing in from 2H; stable ESS end-plate growth adds further support. We forecast FY26 consolidated revenue of KRW392.17bn (+64.0% YoY) and OP of KRW25.9bn (+1,238.5% YoY). 3Q26 should be an all-time-high quarter as Samsung and Apple volumes hit together, and even the seasonally weak 4Q should turn quasi-peak on the Apple effect. Samsung lifts the ceiling; Apple lifts the floor. Having outgrown its own seasonality, the Company is now proving its earnings step-change with numbers, not narrative. Report Link: http://buly.kr/Awi16Hv Hanyang Securities Mid/Small-Cap Channel: https://t.me/hanyangresearch * Compliance Approval obtained