Meritz Securities on the 25th said HANA Micron is seeing additional business improvement alongside growth at its Vietnam subsidiary. It kept a target price of 35,000 won and a "buy" rating. HANA Micron's closing price in the previous session was 23,400 won.
In the third quarter this year, HANA Micron's revenue and operating profit were 432.4 billion won and 38.4 billion won, in line with market expectations. They rose 39% and 120% on-year, respectively. Utilization improved on strong memory demand and new flagship application processor (AP) effects.
In the fourth quarter this year, revenue and operating profit are expected to reach 422.7 billion won and 62.4 billion won, up 10% and 4% on-year, respectively. Kim Dong-Kwan, an analyst at Meritz Securities, said, "Backed by improving memory market conditions, HANA Micron's active hiring and response to demand will roll out starting in the second quarter next year."
For the Vietnam subsidiary, while revenue is expected to be at the prior quarter's level, a one-off gain from the application of a new pricing structure is likely to be reflected, improving consolidation profitability. The Brazil subsidiary is inevitably affected by the off-season, but earnings growth is set to gather pace next year with Brazil's shift to D5.
The analyst explained, "Beyond growth at the Vietnam subsidiary, additional business improvements are under way; at headquarters, memory is supported by strong downstream demand, and AP testing is expected to see higher utilization on the adoption of new models."
He added, "In Brazil, the full-fledged shift to D5 by local clients is expected to lift the average selling price (ASP), and we maintain the sector top-pick view."