Yuanta Securities Korea said on the 26th that while investment by Chinese semiconductor clients has been delayed in the short term, dampening earnings growth at subsidiary MiCo Ceramics, profitability should improve in the long term with a merger with MiCo Ceramics. The firm maintained its Buy rating and raised its target price to 113,000 won from 100,000 won. KOMICO Co. closed the previous session at 80,900 won.
Baek Gil-hyeon, an analyst at Yuanta Securities Korea, forecast KOMICO Co.'s fourth-quarter revenue at 148.2 billion won and operating profit at 29.3 billion won. That would be up 15.9% and 55.4% from a year earlier, respectively. Revenue would be slightly below the market consensus of 154 billion won, but operating profit would top the 26 billion won consensus.
Baek said, "The year-end inventory adjustment at subsidiary MiCo Ceramics is inevitable," but added, "With steady demand for cleaning and coating in the fourth quarter, profitability should improve from the previous quarter as the one-off effect from overseas equipment sales at the Anseong unit in Korea is removed."
Baek analyzed that the current share price decline stems from short-term factors. Baek said, "KOMICO Co.'s share price has fallen about 62% from the Oct. 20 peak of 128,500 won," adding, "Operating profit fell well short of market expectations due to a one-off factor from overseas equipment sales in the third quarter, and delays in investment by Chinese semiconductor clients have reduced the short-term visibility of earnings growth at MiCo Ceramics."
Baek also expects the earnings recovery to continue next year. Baek said, "In October, MiCo Ceramics is delivering solid profitability based on stable utilization," adding, "Record results are expected in 2025 and 2026." Baek continued, "Attention should be paid to merger synergies with subsidiary MiCo Ceramics," and added, "Profitability is expected to be secured as the share of cleaning and coating businesses increases."
Baek forecasts KOMICO Co.'s 2026 revenue and operating profit at 679.9 billion won and 131.9 billion won, respectively. Those would be up 15.6% and 12.9% from a year earlier.