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Expecting record results in 4Q23

2Q23 review: Revenue and OP miss consensus

• For 2Q23, Ray reported revenue of W39.4bn (+26% YoY) and swung to an operating profit QoQ. Both revenue and operating profit fell short of consensus estimates, affected by: 1) the switch to a new dealer in North America; and 2) a delay in Europe-bound shipments of high-end products amid parts supply issues. Combined, these two factors caused the delay of around W6bn worth of shipments. Stripping away these factors, the results were in line with expectations.



Trading at a 12-month forward P/E of 25x, in line with the one-year average but a discount to global peers (27x)

• We expect 3Q23 earnings to fall below market expectations, given continuing parts supply issues (which are unlikely to be fully addressed within the year) and a temporary business disruption in Japan (caused by the subsidiary’s transition to a new CEO). That said, we expect Ray to deliver record-high earnings in 4Q23, boosted by synergy effects with the new North American dealer (which is strongly positioned in the US market) and the normalization of Japan operations.