[Click eStock] DB HiTek, Record High Earnings but Stock Price Declines

[Asia Economy Reporter Junho Hwang] Shinhan Financial Investment lowered the target price of DB HiTek to 100,000 won on the 19th. Although record-high performance is expected again this year, the target price was reduced considering the impact of demand slowdown and oversupply.

DB HiTek achieved sales of 395 billion won and operating profit of 181.5 billion won in the first quarter of this year, surpassing its record-high performance once again. Shinhan Financial Investment expects similar performance improvement in the second quarter and projects total sales of 1.6861 trillion won and operating profit of 781.6 billion won for the entire year based on this.

However, the stock price has been sluggish due to concerns over the peak of the 8-inch foundry market. This is the result of demand forecast failures after COVID-19, power outage at Samsung Electronics' Austin fab, reduced TSMC operating rate due to drought in Taiwan, fire at Renesas fab in Japan, and the spread of the Delta variant in Malaysia. Although all one-time factors have been eliminated, macroeconomic uncertainties are increasing. The growth rate of performance confirmed its peak in the fourth quarter of last year.

Recently, a slowdown in PC demand due to reopening and a slowdown in smartphone demand due to lockdowns in China are actually occurring. The increase in semiconductor inventory by set manufacturers is also causing concern.

However, Namgung Hyun, a researcher at Shinhan Financial Investment, analyzed, "It is still too early to worry about oversupply in the 8-inch foundry," adding, "Due to the increased lead time for semiconductor equipment, equipment manufacturers have no capacity to produce 8-inch equipment, so supply constraints are expected."

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