Techwing Expects Growth in All Business Divisions in 2020... Target Price Raised

[Asia Economy Reporter Oh Juyoun] KB Securities maintains a 'Buy' rating on Techwing, expecting balanced growth across all business divisions this year, and has raised the target price by 34.2% to 20,000 KRW. This follows upward revisions of 15.2% and 21.2% in the controlling shareholder net income forecasts for 2020 and 2021, respectively.

Techwing is projected to record sales of 233.5 billion KRW and operating profit of 42.7 billion KRW this year.

Researcher Seong Hyundong explained, "Operating profit margin is expected to improve to 18.3% due to reduced outsourcing costs from increased production efficiency," adding, "It is important to note that demand is recovering mainly for NAND and SSD/module equipment this year, while sales of the new non-memory test handler equipment are beginning in earnest."

Researcher Seong forecasted memory test handler sales at 97.8 billion KRW. He stated, "This is because, with the recovery of the memory semiconductor market centered on NAND, Micron's chip-level and module/SSD test handler investments continue, and investments from Kioxia (formerly Toshiba Memory) and Western Digital are joining."

Non-memory test handler sales are projected at 34.5 billion KRW. It is analyzed that investments are expanding from two global outsourced back-end process companies that received initial equipment deliveries in early 2019, and that securing two new domestic and one overseas client is expected.

Researcher Seong added, "Sales of other consumable parts such as C.O.K and interface boards are also expected to increase to 49.2 billion KRW," noting, "The increase in non-memory equipment sales and the transition to DDR5 will drive higher replacement demand for consumable parts."

This content was produced with the assistance of AI translation services.