[Click e-Stock] 'HPSP' Returns to Growth... Target Price Raised

On May 7, NH Investment & Securities announced that HPSP is expected to return to a growth trajectory starting this year, raising its target price from KRW 51,500 to KRW 65,000. The company maintained its "Buy" investment rating.

Ryu Youngho, an analyst at NH Investment & Securities, explained, "HPSP will begin new line investments in both logic and memory sectors starting in the second quarter of this year. Major foundry companies, especially in the United States, are scheduled to expand investments in advanced process nodes, and in addition to the leading company TSMC, there is potential for increased new line investments from Samsung Electronics and Intel."

Ryu further stated, "For DRAM, major North American clients have multi-year investment plans set for Taiwan, the United States, and Japan starting in the second half of this year, which is expected to maintain positive momentum. In the mid- to long-term, the potential for the company's equipment to be adopted in 1d DRAM has also increased."

He added, "There is also potential for the company's equipment to be adopted in high-layer NAND, where supply shortages have recently become more pronounced. The diverse portfolio, which is now expanding from the existing logic and foundry sectors into the memory space, is expected to form a stable foundation for future performance."

NH Investment & Securities expects HPSP's performance to recover from the first quarter, which is anticipated to be the lowest point. First-quarter revenue is projected to be KRW 3.18 billion (down 13.8% year-on-year), and operating profit is expected to be KRW 1.4 billion (down 25.2% year-on-year), falling short of market consensus.

However, Ryu emphasized, "Similar to most equipment companies, we expect sales growth to accelerate in the second half of the year, with the first quarter marking the bottom. After last year's contraction, the company is projected to return to growth this year." The guidance for this year is revenue of KRW 24.1 billion (up 39% year-on-year) and operating profit of KRW 12.4 billion (up 38% year-on-year).

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