Meritz Securities has projected that Wonik IPS will continue its strong growth, driven by new investments in memory factories, despite some delays in equipment sales recognition. The firm raised its target price for Wonik IPS to 169,000 won, citing high long-term performance growth potential.
In a report on October 12, Kim Dong-kwan, a researcher at Meritz Securities, stated, "Despite the quarterly deferral of some equipment sales, the growth trajectory based on new domestic memory factory investments and a recovery in foundry investments remains intact. Given the visibility of performance growth until 2028, the stock price is expected to reflect long-term profit increases and show a gradual upward trend."
For the third quarter of this year, Wonik IPS is expected to report sales of 342.5 billion won, a 28% increase from the same period last year, and an operating profit of 58.3 billion won, up 112%. The operating profit margin is projected to be 17%. However, the recognition of sales for foundry equipment scheduled for September has been delayed, leading to an anticipated operating profit that falls about 13% short of market consensus.
Kim explained, "While the recognition of foundry equipment sales has been postponed, the supply of equipment for new memory factories is ramping up, leading to significant growth compared to both the same period last year and the previous quarter."
In the DRAM sector, revenue recognition is expected from new factories such as Samsung Electronics' P4 and SK Hynix's M15X, as well as from upgrades to existing plants. Sales of foundry equipment for domestic clients are expected to be reflected in the third quarter for the Austin plant in the U.S., followed by the Taylor plant in the fourth quarter.
However, increased volatility in the domestic stock market during the third quarter is expected to result in non-cash financial asset valuation losses due to declines in stock prices. Consequently, a decrease in net profit is unavoidable, but it is anticipated to be limited in its impact on annual performance, offsetting gains from financial asset valuations recorded in the previous quarter.
Looking ahead, the surge in order backlog is expected to be gradually reflected in performance, marking the beginning of a significant growth phase. Notably, the new clean rooms at Samsung Electronics and SK Hynix are expected to come online sequentially, with equipment imports projected to expand until 2028.
Kim noted, "Amid an unprecedented cycle of capital expenditure (CAPEX) expansion, the performance strength of Wonik IPS, a leading equipment provider, will be confirmed. We estimate that the compound annual growth rate (CAGR) of operating profit will reach 48% from 2026 to 2028."
As a result, Meritz Securities has maintained a 'buy' rating on Wonik IPS and raised its fair price to 169,000 won. Kim added, "If additional factory investments become visible beyond the already announced memory and foundry equipment investments, the corporate value of Wonik IPS could be quickly reflected in the market."
In a report on October 12, Kim Dong-kwan, a researcher at Meritz Securities, stated, "Despite the quarterly deferral of some equipment sales, the growth trajectory based on new domestic memory factory investments and a recovery in foundry investments remains intact. Given the visibility of performance growth until 2028, the stock price is expected to reflect long-term profit increases and show a gradual upward trend."
For the third quarter of this year, Wonik IPS is expected to report sales of 342.5 billion won, a 28% increase from the same period last year, and an operating profit of 58.3 billion won, up 112%. The operating profit margin is projected to be 17%. However, the recognition of sales for foundry equipment scheduled for September has been delayed, leading to an anticipated operating profit that falls about 13% short of market consensus.
Kim explained, "While the recognition of foundry equipment sales has been postponed, the supply of equipment for new memory factories is ramping up, leading to significant growth compared to both the same period last year and the previous quarter."
In the DRAM sector, revenue recognition is expected from new factories such as Samsung Electronics' P4 and SK Hynix's M15X, as well as from upgrades to existing plants. Sales of foundry equipment for domestic clients are expected to be reflected in the third quarter for the Austin plant in the U.S., followed by the Taylor plant in the fourth quarter.
However, increased volatility in the domestic stock market during the third quarter is expected to result in non-cash financial asset valuation losses due to declines in stock prices. Consequently, a decrease in net profit is unavoidable, but it is anticipated to be limited in its impact on annual performance, offsetting gains from financial asset valuations recorded in the previous quarter.
Looking ahead, the surge in order backlog is expected to be gradually reflected in performance, marking the beginning of a significant growth phase. Notably, the new clean rooms at Samsung Electronics and SK Hynix are expected to come online sequentially, with equipment imports projected to expand until 2028.
Kim noted, "Amid an unprecedented cycle of capital expenditure (CAPEX) expansion, the performance strength of Wonik IPS, a leading equipment provider, will be confirmed. We estimate that the compound annual growth rate (CAGR) of operating profit will reach 48% from 2026 to 2028."
As a result, Meritz Securities has maintained a 'buy' rating on Wonik IPS and raised its fair price to 169,000 won. Kim added, "If additional factory investments become visible beyond the already announced memory and foundry equipment investments, the corporate value of Wonik IPS could be quickly reflected in the market."
* This article has been translated by AI.
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