[Click eStock] ICD, Q2 Earnings Growth Expected... "Stock Price at a Comfortable Level"

[Asia Economy Reporter Minji Lee] Yuanta Securities maintained a buy rating and a target price of 21,000 KRW for ICD on the 14th. This is based on the expectation of strong performance this year driven by order momentum.

In the first quarter, ICD recorded sales of 46.3 billion KRW and operating profit of 8.4 billion KRW, representing increases of approximately 35% and 1912.5% respectively compared to the same period last year. The company posted strong results, surpassing the market's expected operating profit of 4.4 billion KRW.

Researcher Kwangjin Kim of Yuanta Securities stated, “The remarkable improvement in profitability relative to sales growth is due to the reflection of high-margin SDC A3 to Y-OCTA conversion investment volume (about 18 billion KRW).” He added, “Although the revenue recognition for the Canon Doki deposition logistics system was delayed, some sales are estimated to have been recognized as Visionox V3 and Tianma Wuhan fab-directed Dry Etch were delivered normally.”

For the second quarter, expected sales are 125.3 billion KRW and operating profit 21.4 billion KRW, representing growth of 971% year-on-year and a return to profitability, indicating a sharp improvement in performance. Considering the equipment lead time (the period from order to usage), the remaining Visionox V3 and CSOT T4 orders are expected to be recognized as sales in the second quarter. The delayed revenue recognition of the deposition logistics system from the first quarter (60 billion KRW) is also expected to be reflected.

This year’s projected performance is sales of 353.7 billion KRW (190.9%) and operating profit of 55.9 billion KRW (291.2%), indicating higher results than last year. Researcher Kwangjin Kim predicted, “The current order backlog is around 350 billion KRW, and even excluding expectations for A5 investment, including benefits from SDC Q1 conversion investment, additional orders of at least 200 billion KRW are possible by the end of the year.”

He continued, “Currently, the stock price is at the most reasonable level among display equipment sectors,” and explained, “Considering the abundant new order momentum in the Chinese market and expectations for SDC A5 investment, active buying is necessary.”