[Click eStock] "Wonik Materials Achieves Annual Operating Profit of 40 Billion KRW...Stock Undervalued Compared to Performance"

[Asia Economy Reporter Park Jihwan] Hana Financial Investment evaluated on the 24th that Wonik Materials entered the 10 billion KRW range in operating profit for the first time on a quarterly basis in the fourth quarter of last year, and that the stock price is undervalued compared to the annual operating profit exceeding 40 billion KRW. They maintained a 'Buy' investment rating and a target price of 43,000 KRW.

Kim Kyungmin, a researcher at Hana Financial Investment, stated, "In the fourth quarter of last year, sales were 69.3 billion KRW, operating profit was 10.1 billion KRW, and net profit was 10.5 billion KRW," representing increases of 18%, 29%, and 51% respectively compared to the previous year. Wonik Materials is a company that supplies specialty gases used as process materials in Samsung Electronics' semiconductor and display value chains.

A notable point in the fourth-quarter sales is the shipment of specialty gases for NAND, the China Xian production line, and etching processes. Researcher Kim explained, "As the 3D-NAND structure has become more complex with over 90 layers, the demand for materials used in etching processes is increasing," adding, "Some of the 3D NAND etching process gases were mainly supplied to domestic production lines but have been supplied to the China Xian production line since the second half of last year, contributing to performance."

The operating profit of 10.1 billion KRW in the fourth quarter of last year is the first time on a quarterly basis that the company recorded an operating profit in the 10 billion KRW range. Researcher Kim evaluated this as "positive" noting that "despite the occurrence of incentive costs, operating profit exceeded 10 billion KRW, and the fact that it continuously surpassed 10 billion KRW from the first to the fourth quarter." He added, "As a semiconductor process materials company with an annual operating profit exceeding 40 billion KRW, the current market capitalization of approximately 427.4 billion KRW appears to be undervalued."