NH Investment & Securities has lowered its target price for Wonik IPS from 167,000 won to 125,000 won, reflecting concerns over a peak-out in semiconductor companies and a decline in global equipment stocks. However, the firm maintained its 'buy' rating, citing strong demand for artificial intelligence (AI) and ongoing semiconductor supply shortages, which are expected to drive continued investment in new memory lines and generational transitions.
Ryu Young-ho, a researcher at NH Investment & Securities, stated, "Despite various market noises, the strong demand for AI and the semiconductor supply shortage remain unchanged. Investment in new memory lines and generational transitions is ongoing, and expectations for additional investments due to the recovery of Samsung Electronics' foundry are increasing, warranting continued interest in the company."
Wonik IPS reported third-quarter revenue of 337.8 billion won, a 25.8% increase year-over-year and a 56.0% increase from the previous quarter. Operating profit reached 66.7 billion won, up 142.0% year-over-year and 262.6% from the prior quarter. While revenue fell short of market expectations due to some deferred foundry-related sales, operating profit exceeded forecasts.
Ryu explained, "The revenue shortfall was due to some deferred foundry-related sales, which will be reflected in fourth-quarter revenue. Operating profit significantly surpassed market expectations due to economies of scale."
Looking ahead to the fourth quarter, the company is expected to achieve record quarterly revenue, primarily driven by the semiconductor sector. Ryu projected fourth-quarter revenue of 456.1 billion won and operating profit of 68.4 billion won, representing increases of 65.8% and 297.6%, respectively, compared to the same period last year. He noted that semiconductor revenue is expected to exceed 400 billion won, surpassing the previous record of 367.8 billion won set in the second quarter of 2021.
Additionally, Ryu indicated that the display sector is likely to continue struggling in the fourth quarter due to reduced customer investments, falling short of earlier annual revenue expectations. However, he emphasized that the semiconductor sector would offset this decline, allowing the overall annual performance outlook to remain intact. He added, "The company has localized most of its components, so the impact of supply chain issues is expected to be limited."
* This article has been translated by AI.
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