[Click eStock] "Techwing, Strong Earnings Growth Expected... Undervalued Stock Highlighted"

[Asia Economy Reporter Park Jihwan] Korea Investment & Securities evaluated that Techwing, a semiconductor back-end equipment and parts company, is expected to see its sales increase by 23% and 37% this year and next year respectively compared to the previous year, indicating a strong performance streak, but its stock price still remains in an undervalued range. Accordingly, they issued a 'Buy' investment opinion with a target price of 27,000 KRW.

Researcher Lim Yerim of Korea Investment & Securities stated, "New SSD burn-in equipment sales are expected to occur next year, and the DDR5 momentum is likely to begin," adding, "With the arrival of the SSD handler investment cycle, DDR5 mass production, and the start of SSD burn-in equipment supply, sales this year are expected to increase by 23% compared to last year, and grow by 37% next year."

Techwing holds the number one position with a 70% share in the global memory handler market. The entry into the non-memory handler market, which is twice the size of the memory handler market, has become visible, and sales have been actively generated since last year.

The segment with the greatest upside in sales next year is explained to be the SSD product group. Starting next year, three global NAND companies including Micron plan to invest over approximately three years. In particular, the SSD burn-in process is a newly introduced testing process that did not exist before, implemented recently to reduce heat issues caused by improved SSD performance, and Techwing was selected as the first equipment supplier. The total investment amount is about 100 billion KRW over two years. Techwing is expected to generate initial sales of approximately 33 billion KRW next year.

Researcher Lim said, "From the second half of next year, benefits from the full-scale DDR5 generation change will begin, with increased demand for COK next year and memory handlers the following year."

He added, "Sales from non-memory handlers, which have been actively generated since 2018, are expected to increase by 11% next year," and forecasted, "Next year, the existing customer-oriented non-memory product lineup will expand, and one of the new customer-oriented qualifications delayed to next year due to COVID-19 this year will be completed in the first half, contributing to sales from the second half."