[Click eStock] TSE, Positive Q2 Earnings as Well

Shinhan Financial Investment "Maintains TSE Target Price at 90,000 Won"
Growth Expected Based on New Socket 'Eltun'

(Provided by Shinhan Financial Investment)

[Asia Economy Reporter Gong Byung-sun] TSE's second-quarter performance this year showed positive results. Analysis suggests that sales expansion of sockets and probe cards, as well as improvement in subsidiary performance, are expected this year. Shinhan Financial Investment maintained a target price of 90,000 KRW and a 'Buy' investment rating for TSE.

According to Shinhan Financial Investment on the 14th, TSE's second-quarter sales this year were 72.2 billion KRW, up 2% compared to the same period last year. Operating profit was 14.6 billion KRW, down 16% compared to the same period last year. Sales by product were 23.4 billion KRW for probe cards and 9.4 billion KRW for sockets. A probe card refers to a component that connects the chip and test equipment to inspect semiconductor operation. The organic light-emitting diode (OLED) inspection equipment sector, which was sluggish in the first quarter, is positive. Due to increased orders, second-quarter OLED inspection equipment sales are expected to rise 656% from the previous quarter to 6.8 billion KRW.

Operating profit margin is estimated to have improved in the second quarter. Kangho Oh, a researcher at Shinhan Financial Investment, explained, "The overall operating profit margin is expected to be 20.2%, due to the sales leverage effect from increased demand for probe cards and the expansion of sales of 'Eltun,' a new high-profit test socket."

Growth based on Eltun is expected this year. Since Eltun's performance contribution began in the fourth quarter of last year, steady growth has continued. Socket sales this year are expected to increase 113% to 52.5 billion KRW. There is sufficient upward momentum in the second half with customer expansion and increased mounted applications. The growth trend of probe cards is also steep. In the first quarter, demand increased not only from domestic but also overseas customers. Demand for parts due to semiconductor production expansion is expected to continue.

Subsidiary performance is conservatively estimated. Researcher Oh said, "This year, subsidiary sales are estimated to decrease 18% from the previous year to 85.3 billion KRW, and operating profit is expected to decrease 35% to 4.4 billion KRW. However, due to increased demand for semiconductor parts and equipment and yield improvement expectations in the second half, upward revisions of performance estimates are possible."