Momentum Builds... Growing Expectations for Tess '↑'

[Asia Economy Reporter Yoo Hyun-seok] There are forecasts that TES will record strong performance this year. It is analyzed that the order amount will also increase due to expanded investment in NAND.

On the 28th, Kiwoom Securities predicted that TES's sales and operating profit in the first quarter of this year will reach 93.4 billion KRW and 22.7 billion KRW, respectively.

Park Yu-ak, a researcher at Kiwoom Securities, said at the end of last year, "Revenue recognition for semiconductor equipment orders, which were intensively processed, will proceed massively, and the performance of the semiconductor parts division is expected to be better than past seasonality. Regarding selling and administrative expenses, one-time costs recognized in the fourth quarter of last year will be removed, normalizing to past levels and contributing to the improvement of the company's overall operating profit margin."

In particular, the first quarter marks the beginning of expected strong performance this year. Kiwoom Securities forecasted that TES's sales and operating profit for this year will increase by 47% and 148% year-on-year to 361.5 billion KRW and 78.5 billion KRW, respectively.

The reason for the performance improvement is the expansion of NAND investment and the increase in order amounts. He explained, "The NAND industry, which suffered from oversupply, has recently shown a steep recovery. This is because 'the rise in SSD adoption rate in PCs,' 'the recovery of smartphone demand,' and process transition setbacks of some suppliers have rapidly reduced the inventory accumulated within the industry." He added, "Aggressive equipment investment by NAND companies will also begin in earnest."

Along with this, TES's equipment prices are also expected to rise due to the increase in NAND layers. Researcher Park emphasized, "TES's PECVD equipment shows a characteristic where the order amount per unit increases as the number of NAND layers increases. During this period, TES will greatly benefit not only from 'customers' new NAND investments' but also from 'NAND high-layering.'"