[Click eStock] "TLB Resolves Growth Stagnation with Large-Scale Expansion... Target Price Up"

"Need for Revaluation Logic Following Expansion Decision"
"Capital Increase as a Mid- to Long-Term Positive Factor"

On April 14, Kyobo Securities maintained its "Buy" investment opinion on TLB and raised its target price from 82,000 won to 95,000 won.

On the same day, Heecheol Park, an analyst at Kyobo Securities, highlighted that TLB recently announced a paid-in capital increase of 120 billion won and a 1:1 bonus issue simultaneously. The purpose of this paid-in capital increase is to secure funds for additional expansion in Vietnam. Analyst Park explained that through an investment of approximately 120 billion won, TLB aims to establish manufacturing facilities on the Vietnam site at a level equivalent to its headquarters plant, thereby doubling its production capacity (Capa) compared to last year.

Regarding this, Analyst Park stated, "Looking at similar cases, a paid-in capital increase for large-scale facility investment has been an indicator of robust industry conditions," adding, "Since domestic memory companies have recently raised substrate prices, the substrate boom based on artificial intelligence (AI) demand is still ongoing."

For the first quarter on a consolidated basis, revenue is estimated at 74.7 billion won (up 41.0% year-on-year), and operating profit is estimated at 9.5 billion won (up 407.8%). Analyst Park commented, "As strong demand for substrates continues, the company is responding at a full-capacity level. Despite the trend of rising manufacturing costs, margins remain solid. In addition to sustained demand focused on high-value-added BVH products, sales from mass production of SOCAMM, a next-generation memory form factor, have started to be reflected from the first quarter."

For the full year, revenue is estimated at 346.4 billion won (up 34.0% year-on-year), and operating profit at 48.3 billion won (up 85.9%). It is analyzed that the effect of de-bottlenecking processes carried out in the second half of last year will begin to be fully reflected in sales from the second half of this year, thereby contributing to overall company performance. The additional capacity secured through this paid-in capital increase is expected to be reflected in sales from 2028.

Analyst Park added, "TLB has addressed the potential for mid- to long-term growth stagnation and eliminated factors for stock de-rating. Although there may be short-term investor sentiment deterioration or supply-demand pressures due to the capital increase, the current share price is attractive considering the mid- to long-term outlook."

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