[Click eStock] Wonik Materials, Undervalued Material Company... "Stock Price Expected to Rise"

Hana Financial Investment Report: Undervalued Companies in the Materials Sector
Operating Profit of 42.2 Billion KRW This Year... Expected 17% Growth Compared to Last Year

[Asia Economy Reporter Minji Lee] Hana Financial Investment maintained a buy rating on Wonik Materials on the 29th and set a target price of 33,000 KRW. It is an undervalued stock among semiconductor and display manufacturing process material companies, and it is expected that the stock price will show an upward trend soon, supported by improving earnings.

Wonik Materials is a supplier of specialty gases used in semiconductor and display process materials and was spun off from Wonik IPS in 2006. A company with similar main products is SK Materials.

Wonik Materials has a high sales proportion targeting Samsung Electronics. In addition, it has secured customers such as SK Hynix, TSMC, DB HiTek, MagnaChip, and Samsung Display. The main products are deposition gases (NH3, N2O), cleaning and etching gases, and photo process gases (CO2).

This year, sales and operating profit are expected to increase by 19% and 17% respectively from a year ago, reaching 263.2 billion KRW and 42.2 billion KRW. The operating profit margin is also expected to reach 16%. This is higher than Wonik Materials’ business plan (240-250 billion KRW), and the company is believed to have conservatively set the forecast in preparation for a decline in market share of etching gases.

Kim Kyung-min, a researcher at Hana Financial Investment, analyzed, “The effect of 3D-NAND high-layering in the front-end industry is expected,” adding, “Sales growth due to the high-layering effect is also appearing in other process material equipment suppliers in the etching value chain.”

Second-quarter sales and operating profit are expected to be 63 billion KRW and 10.6 billion KRW respectively, in line with market expectations of 63.5 billion KRW in sales and 10.4 billion KRW in operating profit. Researcher Kim said, “The initially expected inventory stocking effect disappeared, but the increase in specialty gases due to the expansion of production facilities in Xian and Pyeongtaek in the front-end industry will be reflected,” adding, “Third-quarter sales and operating profit are expected to be 69 billion KRW and 12.2 billion KRW respectively, with a seasonal effect anticipated.”

Wonik Materials has shown a relatively neglected stock price trend compared to other process material stocks. This is because there were no events that could drive stock price increases, such as mergers and acquisitions for new business entry or large-scale expansions. Researcher Kim Kyung-min advised, “Since the beginning of the year, SK Materials (3.6%), TCK (34%), and 미코 (183300)">코미코(34%) have risen, but Wonik Materials has fallen about 16%,” adding, “It is a suitable buy stock for investors who are burdened by high-value process materials and prioritize corporate fundamental factors.”

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