[Click eStock] PSK Breaks Out of Undervaluation Phase to Establish Itself as a Leading Stock

[Asia Economy Reporter Lee Seon-ae] Hana Financial Investment forecasted on the 7th that PSK will emerge as a leading stock in the semiconductor front-end equipment sector, breaking away from the undervalued price-to-earnings ratio (PER) phase, as it stands out both as a beneficiary of the non-memory sector and as a beneficiary of overseas client facility investments.

As a Korean semiconductor equipment stock, PSK is at a critical crossroads. It is somewhat known that among Korea's front-end equipment suppliers, the sales contribution from non-memory clients is relatively high. Moving forward, it will be important whether the sales contribution to overseas clients continues to exceed 50%.

Kim Kyung-min, a researcher at Hana Financial Investment, stated, "Semiconductor front-end equipment suppliers with relatively high sales dependence on Korean clients typically see their highest sales in the first or second quarter, with a relative slowdown in the second half. However, if significant sales to overseas clients occur, PSK is judged to be a semiconductor equipment company with a very high possibility of breaking away from such typical seasonality." He added, "Among small and mid-cap semiconductor stocks, there are companies whose stock prices rise long-term under foreign investor interest without being greatly affected by the memory semiconductor market conditions."

PSK's estimated sales for the third quarter of 2021 have been revised upward from 61 billion KRW to 81 billion KRW, as overseas client sales (exports) are expected to remain robust. When estimating or analyzing PSK's performance in the first half, it was assumed that the export ratio was around 50%, but it is expected to exceed 60% in the third quarter.

Although it is still early to estimate sales for the fourth quarter of 2021, it is expected to be higher than the third quarter's sales. This is because sales are anticipated from the domestic client's Icheon Fab. Accordingly, fourth-quarter sales are estimated at 82 billion KRW, higher than the third quarter's estimate of 81 billion KRW. The annual performance for 2021 is estimated at sales of 384.3 billion KRW, operating profit of 80.4 billion KRW, and net profit of 65.7 billion KRW. Assuming increased sales to overseas clients and contributions from new equipment, the annual performance for 2022 is estimated at sales of 403.5 billion KRW, operating profit of 85.6 billion KRW, and net profit of 67.1 billion KRW. Based on a market capitalization of 514.6 billion KRW as of October 5, the PER for 2021 and 2022 are 7.8 times and 7.7 times, respectively.

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