[Click eStock] "Wonik IPS, Memory Supply-Demand Slowdown Impact... Investment Opinion & Target Price ↓"

[Asia Economy Reporter Oh Ju-yeon] NH Investment & Securities has forecasted that semiconductor equipment company Wonik IPS may see conservative execution of semiconductor investments by its clients in 2021. It explained that memory purchases have been shrinking since the third quarter of this year, making a decline in memory prices inevitable by the end of the year. Accordingly, the investment opinion was downgraded from 'Buy' to 'Hold', and the target stock price was lowered from 49,000 KRW to 38,000 KRW.

On the 24th, NH Investment & Securities projected Wonik IPS's sales for this year to be 1.0796 trillion KRW and operating profit to be 150 billion KRW, representing increases of 61% and 265% respectively compared to the same period last year. The improvement in performance is expected due to increased investments by major clients such as Samsung Electronics in the Pyeongtaek 2 line, Xi'an 2 line, and foundry sectors.

However, a risk factor is that the memory semiconductor industry is planning investments conservatively for 2021. In the first half of 2020, due to increased non-face-to-face demand caused by COVID-19, hyperscalers like Google, Amazon, and Facebook increased investments in data centers, but currently, their memory inventories have exceeded normal levels. It is understood that memory purchases have been shrinking mainly among these companies since the third quarter. This is why a decline in memory prices by the end of the year is unavoidable.

Researcher Doh Hyun-woo analyzed, "The point at which investments are expected to increase again is the second half of 2021," adding, "After some visibility of memory supply and demand normalization in the first half of this year, memory companies will aggressively adjust their investment plans again."

Doh also forecasted that "Semiconductor equipment companies will also be affected by these plans," expecting Wonik IPS's 2021 sales and operating profit to decrease by 2% and 9% year-on-year to 1.0567 trillion KRW and 136.6 billion KRW, respectively.

Meanwhile, Wonik IPS was established in April 2016 through a spin-off of the semiconductor, display, and solar cell equipment business divisions of Wonik Holdings Co., Ltd. As of 2019, its sales amounted to 669.2 billion KRW, with product sales comprising approximately 53% semiconductor equipment and 47% display equipment. It possesses a diverse lineup of equipment in the semiconductor and display fields and holds competitiveness in the plasma-enhanced chemical vapor deposition (PECVD) sector among semiconductor equipment. In display equipment, it has strengths in dry etcher equipment, and in February 2019, it merged with Wonik Terrasemicon, adding a lineup of heat treatment equipment.

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