[Click eStock] "ENF Technology, High DRAM Exposure... Target Price Raised"

On October 22, NH Investment & Securities maintained its "Buy" rating on ENF Technology, describing it as "a comfortable choice with high DRAM exposure and still attractive valuation," and raised its target price from 61,000 won to 64,000 won.

On this day, NH Investment & Securities analyst Joo Minwoo stated, "Recently, the warmth in the semiconductor industry has spread to NAND, leading to a significant rise in the stock prices of materials, parts, and equipment companies. However, in the short term, it will be difficult for NAND utilization rates to increase meaningfully. Therefore, it is advisable to focus on companies with high DRAM exposure."

Analyst Joo explained, "Semiconductor manufacturers do not need to rapidly increase the utilization rate of NAND, which has lower margins. In the case of ENF Technology, its DRAM exposure is high (estimated at 65% within the semiconductor segment), and it also sells materials for high-bandwidth memory (HBM), so its earnings visibility is higher compared to domestic materials companies with high NAND exposure."

Additional factors for further upside include "an increase in sales of high-margin products due to higher TSV (Through-Silicon Via) utilization rates at client companies" and "early delivery of high-selectivity phosphoric acid (HSN) etchants driven by accelerated NAND conversion."

For the third quarter, the company is expected to post sales of 169 billion won (up 12% year-on-year and 3% quarter-on-quarter) and operating profit of 22.5 billion won (up 13%, with an operating margin of 13.3%).

Analyst Joo commented, "Growth will continue thanks to the strength in the DRAM market and the display industry's peak season."

Regarding the fourth quarter, he forecasted, "A temporary decline in margins is expected due to one-off personnel expenses, but the mass production of high-purity hydrofluoric acid starting at the end of the year and new factory-related supply for client companies will continue to drive sales growth and margin improvement next year."

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