Meritz Securities said Wonik IPS is likely to continue strong earnings growth on the back of a boom in memory semiconductors and a prolonged capital expenditure (CAPEX) cycle. It kept a "buy (BUY)" rating and raised its target price to 140,000 won from 87,000 won. Wonik IPS closed at 114,800 won in the previous session.
Kim Dong-Kwan, an analyst at Meritz Securities, said, "The CAPEX cycle of semiconductor corporations will continue through 2027," adding, "If new overseas customers finish evaluating supplies of chemical vapor deposition (CVD) equipment by 2026 and full-scale supplies become visible starting in 2027, earnings growth outpacing the industry growth rate will again be possible."
Meritz Securities estimated Wonik IPS's operating profit at 181.8 billion won in 2026 and 243.8 billion won in 2027. That would be up 146% and 34% on-year, respectively. It especially projected memory equipment revenue to grow 40%, and said foundry equipment revenue is also expected to show a sharp increase.
To derive the target price, a 2026 estimated price-earnings ratio (PER) of 41 times was applied. It said this is in line with the 2026 estimated average PER level of global top-tier semiconductor equipment companies.
Kim said, "Wonik IPS currently trades at 33 times 12-month forward PER (12MF PER) and a price-to-book ratio (PBR) of 4.9 times, implying a valuation higher than in the past," but added, "Given an unprecedented memory upcycle and a favorable KOSDAQ supply-demand environment, there is a high chance the top end of the valuation range will be surpassed again."