Hyundai Motor Securities on the 24th raised its target price for PSK(319660) by 13.4% to 220,000 won from 194,000 won, saying global semiconductor manufacturers are expanding capital expenditures (CAPEX) faster and on a larger scale than expected. It maintained a "buy (BUY)" rating.
Researcher Yun Dong-uk at Hyundai Motor Securities said, "Capital spending by major global semiconductor manufacturers is expected to be carried out faster, on a larger scale, and for a long period than expected," and added, "As the global market dominance of the main equipment, PR strip (PR Strip), continues, results will also trend upward."
Hyundai Motor Securities noted that PSK's major customers are simultaneously moving to ramp up investment. Domestic memory companies are moving up schedules for bringing in new fab (Fab) equipment, and investment in the Yongin semiconductor cluster is also expected to accelerate compared with earlier plans.
Chinese memory companies are continuing aggressive capacity expansions based on funds secured after listing, and the North American foundry company is also resuming capital expenditures in line with rising CPU demand and raising its CAPEX guidance, it said.
Yun said, "The CAPEX growth rate of PSK's four major customers is expected to reach 55.6% this year and 26.3% next year."
PSK's market dominance is also expected to hold for the time being. The company's flagship dry strip (Dry Strip) equipment ranked No. 1 in global market share as of last year, and the competitive environment is seen as favorable due to U.S. semiconductor restrictions on China. With process miniaturization, supply of bevel etch (Bevel Etch) equipment is also expanding, and the share of equipment sales is expected to rise.
Hyundai Motor Securities forecast PSK's revenue this year at 681.1 billion won and operating profit at 185.9 billion won, up 49% and 110%, respectively, from a year earlier. Next year, revenue is expected to rise to 891.2 billion won and operating profit to 258.7 billion won, up 30.8% and 39.2%, respectively, extending the growth trend.
Second-quarter results were also projected to be strong. Revenue is estimated at 164.7 billion won, up 51.9% from a year earlier, and operating profit at 46.0 billion won, up 123.9%. The operating profit margin (OPM) is expected to come in at 28%.