[Click e-Stock] "TES Continues to Benefit from Upstream Investments... Target Price Raised"

On September 4, SK Securities raised its target price for TES from 29,000 won to 33,000 won, citing expectations that the company will achieve its highest-ever annual revenue this year.

Lee Dongjoo, a researcher at SK Securities, analyzed that TES will continue its upward earnings trend due to increased investments from its major clients. He stated, "Since last year, TES has actively responded to the transition investments in DRAM, reducing its heavy reliance on NAND. In the first half of this year, the company also benefited from SK Hynix's DRAM transition investments, with DRAM driving earnings growth. Looking ahead, TES is expected to continue benefiting from new domestic investments, such as Samsung Electronics' P4 DRAM and SK Hynix's M15X DRAM projects."

Lee added, "The order value per unit for NAND is much higher than for DRAM, and recently, there have been signs of changes in NAND investment trends. Due to the recent decision to withdraw the VEU status in the United States, there is a possibility that Samsung Electronics' Xi'an NAND fab transition investments could face setbacks, which introduces uncertainty for future orders. However, if related investments are redirected to domestic facilities, the overall impact is expected to be limited."

The outlook for next year is also positive. Lee said, "Since investments in NAND V10 are expected to begin domestically in the first half of 2026, the visibility of continued earnings growth remains high. In addition, high-value-added equipment such as BSD is expected to see even greater order value as it enters the final qualification stages."

In the second quarter of this year, TES reported revenue of 82.1 billion won and operating profit of 20.4 billion won, up 36% and 103%, respectively, compared to the same period last year. Both figures exceeded market expectations.

Lee forecasted, "Although earnings are expected to decline in the third quarter due to the high base effect from the previous quarter, the impact of Samsung Electronics' P4 investments in the fourth quarter will likely drive TES to achieve its highest annual revenue."

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