DB Securities on the 31st analyzed HANA Materials and said it is likely to face a favorable business environment next year as well. It raised the target price to 54,000 won from 30,000 won and maintained a buy rating. The previous trading day's closing price of HANA Materials was 43,100 won.
DB Securities projected that HANA Materials' fourth-quarter revenue and operating profit this year will come in at 80.9 billion won and 17.7 billion won, up 17% and 16% from a year earlier, respectively. On the back of a strong DRAM cycle, higher utilization rates, and proactive parts inventory build by equipment customers, results are expected to increase from the previous quarter.
The DRAM market is also expected to remain favorable next year on strong server demand. Seo Seung-yeon, an analyst at DB Securities, said, "Memory companies are investing in new production capacity (CAPA) during the DRAM boom, and supply of parts for key equipment specifications is increasing."
Seo added, "NAND is seeing weak parts demand due to delays in process migration by end customers," but noted, "With some NAND makers increasing facility investment next year, growth in HANA Materials' parts performance for NAND equipment is also expected."
DB Securities forecast that next year HANA Materials will post revenue and operating profit of 297 billion won and 70.3 billion won. That would be increases of 9% and 50% from a year earlier, respectively.
Seo said, "Considering supply of new covers and ground rings for etching equipment in NAND with 400 layers or more, the mid- to long-term earnings growth trajectory remains intact."