Hana Securities on Tuesday raised its target price for Tes to 117,000 won from 67,000 won, saying the semiconductor equipment maker is positioned to benefit from both DRAM and NAND investment. It maintained its “buy” rating.
Analyst Kim Rok-ho said Tes’ first-quarter revenue is forecast to rise 16% from a year earlier to 97.7 billion won, with operating profit up 11% to 18.0 billion won. He said Tes continues to benefit from new DRAM investment and NAND conversion investment tied to Samsung Electronics’ Pyeongtaek P4 (fourth plant) in Gyeonggi province and SK hynix’s M15X plant in Cheongju, North Chungcheong province.
Kim said solid memory demand is prompting customers to move faster than expected on capital spending, increasing the likelihood that the scale of DRAM conversion investment will exceed earlier estimates.
He said Tes could post quarter-on-quarter growth each quarter, supported by expanded customer investment and what he described as company-specific growth drivers.
Kim said new DRAM-driven equipment, known as BSD, is receiving positive feedback for use in HBM, or high-bandwidth memory, and could begin contributing to revenue as early as the second half. He added that ACL, Tes’ main equipment line, is also increasingly likely to be reflected in second-half results.
With shipments of those tools expected to lift average selling prices, Kim said Tes may see not only top-line growth but also improved profitability.
Kim said expectations for expanded investment by memory makers and for new fabs from next year have pushed the average price-to-earnings ratio for global front-end equipment makers to 35.5 times. He said Korean companies could also benefit and potentially track the higher valuation multiples of global peers.
* This article has been translated by AI.
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