Hana Securities said on the 5th that PSK is expected to see earnings improve as domestic and overseas memory companies, including Samsung Electronics, Micron and Intel, expand investment. It kept its "Buy" recommendation and raised the target price to 160,000 won from 128,000 won. PSK closed at 114,400 won in the previous session.
Kim Rok-ho, an analyst at Hana Securities, said, "It is understood that new investments by domestic memory companies, investments to shift to the 1C NANO process, and Micron's investments are proceeding smoothly." Investments by companies in the Greater China region are being executed at levels exceeding initial expectations, and revenue from U.S. customers is steadily continuing, so the customer mix is expected to be similar to the first quarter.
Hana Securities forecast PSK's revenue and operating profit for the second quarter of this year at 162.2 billion won and 50.2 billion won. Revenue is up 50% and operating profit is up 144% from a year earlier. On the back of better-than-expected revenue, the company delivered high profitability in the first quarter, and this trend is expected to continue in the second quarter.
For this year, PSK's revenue and operating profit are expected to rise 45% and 107% on-year to 660.9 billion won and 183.6 billion won, respectively. Based on first-quarter results, the company said quarterly earnings are set to trend higher. In particular, Hana Securities analyzed that, in addition to investments by domestic and overseas memory companies, PSK's earnings will show a stable growth trajectory thanks to the resumption of investment by customers in Greater China and Intel.
Kim said, "Recently, because domestic customers are moving to bring forward part of the investments slated for 2027, we cannot rule out the possibility that current estimates will be exceeded," adding, "In addition, for memory companies in the Greater China region, with listing dates now set, they are expected to show strong expansion intentions in the second half as well." In particular, overseas customers often have relatively higher average selling prices, which could also contribute to improved margins.
The reason for raising PSK's target price, it said, is that it increased its earnings per share (EPS) estimates for this year and next by 27% and 23%, respectively, from previous levels. This reflects expectations that, based on first-quarter results, the company can achieve much higher profitability than in the past.
Kim said, "Investments by memory and foundry companies will start in earnest in 2027 rather than 2026," adding, "In 2027, new production facilities (fabs) by the three major domestic and overseas memory companies will open, and CXMT is highly likely to carry out ambitious expansion based on IPO proceeds."
Kim added, "In addition, as new plant investments by Samsung Electronics and Intel are scheduled to proceed in the foundry space, equipment investments are expected to be active in 2027 and 2028."