[Click eStock] "Hanamaterials, Earnings Expected to Rise Due to Expansion Effect"

Hana Financial Investment Report

[Asia Economy Reporter Minji Lee] Hana Financial Investment forecasted on the 11th that Hana Materials is expected to significantly increase its production capacity due to the expansion effect. The investment opinion was maintained as Buy, with a target price of 96,000 KRW.

Hana Materials is a supplier of consumables for semiconductor processes. On the 8th, it announced the establishment of the Asan Plant 2 to expand production capacity in response to increased customer demand. The facility investment amount is 100 billion KRW, which corresponds to 38.91% of its equity capital. The funding will come from internal funds and external financing, but considering the annual free cash flow exceeds 50 billion KRW, it is estimated that the expansion can be financed with internal funds.

Once the expansion is completed, production capacity is expected to increase to about three times the current level. Currently, the sales achievable from Hana Materials' production facilities are estimated to be around 300 to 400 billion KRW annually, and after the expansion, production capacity is expected to nearly triple.

Researcher Kyungmin Kim of Hana Financial Investment said, "This lays the foundation to achieve 1 trillion KRW in the mid to long term," adding, "The production lines currently held are expected to be fully operational within 2023."

The demand from the upstream industry is also bright. Among semiconductor front-end equipment suppliers, the consumables and service sales of AMAT and Lam Research are 5.7 trillion KRW and 5.5 trillion KRW respectively, based on recent years. Since the Russia-Ukraine war, lead times in the semiconductor front-end equipment market have increased, causing these equipment companies to focus more on their core equipment business, thus requiring more support from partner companies like Hana Materials in the consumables and service sectors.

Researcher Kim explained, "The market size for silicon rings and electrodes is estimated to be around 1.05 trillion KRW annually," and added, "Considering the trickle-down effect from semiconductor front-end equipment suppliers, the market size for silicon rings and electrodes is expected to grow even larger."

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