[Click eStock] "KNJ, Sales Expansion Expected with SiC Capacity Increase"

[Asia Economy Reporter Hyunseok Yoo] Kakao Pay Securities analyzed on the 17th that KNJ is expected to expand sales due to the SiC ring expansion. No investment opinion or target price was presented.

Seungcheol Lee, a researcher at Kakao Pay Securities, said, "On the 16th, a public announcement was made regarding a 16 billion KRW investment in new factory construction and equipment, which is a large-scale facility investment amounting to 60% of equity capital," adding, "Once the investment, scheduled to be completed by October 2021, is finished, KNJ's SiC ring sales are expected to expand to about 30 billion KRW annually."

He stated, "Until now, KNJ's SiC sales structure has been centered on SK Hynix, but with the expansion investment as a turning point, expansion of SiC sales channels to Samsung Electronics is expected," and evaluated, "If SiC sales to Samsung Electronics proceed smoothly, it is attractive in that additional investments and consequent sales growth can be anticipated."

Kakao Pay Securities expects that while the importance of SiC is gradually increasing, the number of companies capable of excelling in this field is limited, so KNJ is likely to benefit. The researcher explained, "As process advancement progresses, CVD and Dry Etching processes become more challenging, highlighting the importance of SiC rings," adding, "While TC Tech holds an overwhelming position in the domestic SiC market, SiC companies including KNJ are seeking to expand their market share." He continued, "KNJ plans to expand SiC sales channels focusing on the aftermarket, directly supplying device companies rather than the before-market supplying OEMs to equipment companies, and has the advantage of having established proprietary know-how in graphite purification, CVD coating, and thin film analysis technologies, which frees them from patent disputes with competitors."