[Click eStock] PSK, Unchanged Leading Position in Non-Memory Front-End Process

[Asia Economy Reporter Lee Seon-ae] Hana Financial Investment forecasted on the 19th that PSK will once again attract attention as a beneficiary stock of non-memory front-end semiconductor equipment. However, no investment opinion or target price was provided.

PSK, a supplier of semiconductor front-end equipment, recorded sales and operating profit of 95.5 billion KRW and 24.9 billion KRW respectively in the first quarter of 2021, and in the second quarter achieved sales of 125.8 billion KRW and operating profit of 31.7 billion KRW. This represents increases of 93.7% and 301.2% compared to the same period last year. These figures significantly exceeded Hana Financial Investment’s estimates (sales of 100 billion KRW, operating profit of 25.2 billion KRW). While domestic customers’ equipment investments remained steady, overseas non-memory semiconductor customers’ equipment investments were also robust. Sales of strip equipment, which can be considered the core business, remained solid.

On the 17th, the stock price fell by 0.13% on the day of the semi-annual report disclosure. Generally, the visibility of the next quarter’s performance greatly influences the stock price, and the third quarter sales are estimated to decrease to 61 billion KRW from 125.8 billion KRW in the second quarter. This takes into account that domestic customers’ equipment investments traditionally decline in the third quarter. When a decrease in next quarter sales is expected, the stock price can fall significantly on the earnings announcement day; however, the limited decline of -0.13% is attributed to the fact that the estimated sales (61 billion KRW) for the third quarter are expected to increase compared to the same period last year (50.9 billion KRW in Q3 2020) due to sales recognition of equipment for overseas semiconductor customers. It is also judged that PSK’s higher proportion of sales to non-memory customers and overseas customers compared to other semiconductor front-end equipment suppliers was re-emphasized.

PSK is establishing a campus with PSK Holdings in Pangyo Techno Valley 2. The groundbreaking ceremony was held on the 17th. PSK’s external growth depends on expanding sales to overseas customers and new equipment sales, and internally, securing research, development, and sales capabilities to support this is important. Once the research and development facility is completed in Pangyo in 2024, it is expected that securing personnel will become easier in terms of geographical accessibility. Interest in non-memory semiconductor beneficiary stocks is gradually increasing in the Korean stock market, and by sector, attention has been focused more on back-end processes (equipment, sockets) than front-end processes. In this regard, PSK’s stock price trend has been disappointing since April, after a rapid upward trend in March and April.

Kim Kyung-min, a researcher at Hana Financial Investment, emphasized, "It is still believed that there is more to show in the future than what has been shown so far," and added, "At the point when quarterly performance re-enters the peak season, it is expected to be re-recognized as a beneficiary stock of non-memory front-end semiconductor equipment."

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