LS Securities said on the 13th that although Park Systems' share price fell sharply after this year's third-quarter earnings release, it is instead a good opportunity to buy on the dip. It maintained a target price of 300,000 won and a "buy" rating. The previous trading day's closing price of Park Systems was 228,000 won.
In the third quarter of this year, Park Systems posted revenue and operating profit of 45.6 billion won and 8.6 billion won. Those figures were up 10% and down 1% from a year earlier, respectively. The main reasons for the weaker results were that strong first-quarter performance had lifted market expectations and that recognition of equipment sales for HDD was partially delayed.
After the earnings release, Park Systems' share price plunged 13% in a single day. Cha Yong-ho, an analyst at LS Securities, said, "This earnings release could serve as a trigger to recalibrate expectations that had become excessively high and to reduce the volatility of results," adding, "An annual revenue growth rate around 20% can be maintained."
Regarding the reason for the recent share price correction, Cha said, "It is partly because third-quarter results did not meet market expectations, but also because investors' attention is focused on traditional memory equipment," and added, "However, unlike other equipment makers whose results are excessively volatile due to high reliance on memory, Park Systems is achieving steady growth and stable profitability."
He added, "Given that the current share price has fallen to the bottom of Park Systems' historical price-to-earnings (P/E) band, it should be used as a good opportunity to buy aggressively."