[Click eStock] "Wonik Materials, Excessively Undervalued Compared to Specialty Gas Industry Conditions"

[Asia Economy Reporter Park Jihwan] Hana Financial Investment evaluated that Wonik Materials is excessively undervalued compared to the special gas industry conditions on the 14th. Wonik Materials is a supplier of special gases used in semiconductor and display processes.

Kim Kyungmin, a researcher at Hana Financial Investment, said, "Wonik Materials' fourth-quarter sales and 2021 annual sales are estimated at 85.2 billion KRW and 306.5 billion KRW, respectively," adding, "This exceeds the consensus (fourth quarter 82.8 billion KRW, annual 304.1 billion KRW)."

The reason the sales estimates exceed the consensus is due to a shortage in the supply of some special gases. Researcher Kim Kyungmin analyzed, "Due to the spread of COVID-19 and the strengthening of ESG activities, the operating rates of petrochemical production facilities and steel mills, where byproduct production or gas capture previously took place, have declined, making some special gases captured and processed (synthesized, refined) from these facilities very scarce."

In 2015, there was also a case where the operating rate of air separation units (ASU) in the Russia-Ukraine steel complexes declined due to the Ukraine conflict, causing the price of neon gas used for semiconductor laser light sources to surge. At that time, Wonik Materials, which benefited from this, recorded sales of 192.5 billion KRW, a 32.6% increase compared to 2014.

Additional sales growth is also expected. Considering that the sales contribution effect from the shortage of some special gases will become full-scale from the second half of this year, Wonik Materials' sales next year are expected to grow significantly compared to the previous year. The sales estimate is 353.6 billion KRW, close to the consensus (351.8 billion KRW). Converted to sales growth rate, it is 15.4%.

Researcher Kim said, "Based on the earnings consensus, Wonik Materials' price-to-earnings ratio (PER) is 7.3 times this year and 8.3 times next year, which is considered excessively undervalued given the favorable conditions in the special gas industry."

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