Shinhan Investment Corp. analyzed on the 17th that the current expansion of fair equipment for STI has been underestimated and that the continued advancement of business is positive. It raised the target price from the previous 28,000 won to 29,000 won and maintained its investment opinion of 'buy.' STI's closing price on the previous transaction day was 20,900 won.

STI's reflow equipment for HBM./Courtesy of STI
STI's reflow equipment for HBM./Courtesy of STI

In the fourth quarter of last year, STI recorded sales of 131.7 billion won and operating profit of 18.3 billion won, increasing by 113.9% and 674.4% respectively compared to the previous quarter. This figure exceeds the earnings consensus by 19.7%.

Namgoong Hyun, a senior researcher at Shinhan Investment Corp., explained, "Despite the occurrence of one-time expenses, including performance pay, profitability improved significantly due to improved product mix, and revenue increased with the recognition of high-margin equipment sales."

The supply of central medication process systems (CCSS) equipment for high bandwidth memory (HBM) is progressing as planned. However, as the sales of the automated coupling system (ACQC) for chemical supply devices have begun in earnest, the improvements in profitability appear to be greater than expected.

Shinhan Investment Corp. forecasted that this year, STI's sales will increase by 40.9% year-on-year to 470.7 billion won, while operating profit is expected to rise by 97.6% to 53.9 billion won. Research Institute Nam stated, "This reflects the expansion of large-scale projects in the entire process and the supply of HBM-targeted CCSS equipment, as well as the sales of front and back-end equipment."

He further noted, "Since the expansion of demand for legacy semiconductors was confirmed in February, expectations are growing among semiconductor equipment companies following the recent announcement of price increase plans for NAND by SanDisk and YMTC," adding, "New process entry signifies technological advancement and serves as a factor for valuation reassessment of corporations."