Meritz Securities said on the 9th that ISU Petasys' earnings are expected to improve in a structurally growing phase for multilayer printed circuit boards (MLB). It maintained a target price of 170,000 won and a "buy" rating. ISU Petasys' previous trading day closing price was 120,100 won.
Meritz Securities forecast ISU Petasys' first-quarter revenue this year at 325.4 billion won and operating profit at 64.6 billion won. Those figures represent increases of 28.9% and 35.5%, respectively, from a year earlier. Operating profit is expected to come in slightly below the market consensus of 68.3 billion won.
Yang Seung-su, an analyst at Meritz Securities, said, "Demand for high-layer boards for artificial intelligence (AI) servers and networks centered on key customer G remains strong, outpacing supply," but noted, "Shipments were partly limited versus demand due to raw material supply issues at the start of the year, and fewer working days in February added to the impact."
Yang said, "Since March, the related issues have been resolved and shipments are rapidly normalizing," adding, "Price pass-through for raw material cost increases is also getting underway in earnest, so from the second quarter, a steep earnings improvement exceeding market expectations will resume."
Meritz Securities noted that as AI hardware units are reorganized around systems, the need for more advanced interconnect design is growing. In this process, a structurally growing phase is expected to continue, with rising demand for MLB boards and simultaneous spec upgrades.
Yang said, "The average selling price (ASP) uplift arising from key customer G converting all AI accelerators and switches to multilayer products starting with the 8th generation of tensor processing units (TPU) remains underestimated."
He added, "In the third and fourth quarters this year, when 8th-generation shipments to G ramp up in earnest, a rerating based on upward revisions to earnings estimates will take place."