[Click eStock] "EO Technics Recovers Both Growth Momentum and Earnings Stability"

Equipment Sales Growth Reignites... Stable Growth Expected Through Next Year

Exterior view of the EOTechNix headquarters (Source: EOTechNix official website)

[Asia Economy Reporter Minwoo Lee] EOTechNix is expected to achieve stable performance as it enters a phase of full-scale growth. This outlook is based on the anticipation that sales of semiconductor laser annealing and marker equipment will ramp up significantly.

On the 26th, Hi Investment & Securities newly issued a target price of 150,000 KRW and a 'Buy' investment rating for EOTechNix. The closing price on the previous trading day was 111,800 KRW.

Over the past three years, EOTechNix's operating profit margin had been somewhat sluggish, ranging from 3% to 121%. However, it is expected to reach between the high teens to 20% starting this year, which is the highest level historically. This is because sales of laser annealing equipment (a process that repairs crystal defects on semiconductor surfaces caused by ion implantation through laser heat treatment) are expected to ramp up, reducing the burden of research and development (R&D) costs. It is also evaluated that the equipment is highly likely to continue being adopted in customers' latest fine processes going forward.

Additionally, the Stealth Dicing equipment, which previously had annual sales around 60 billion KRW but experienced a sales halt due to patent disputes with competitors, will see the competitor's patent period expire in the second half of this year. Through consultations with customers, it is expected to record large-scale performance again starting next year. Sales of annealing and cutting equipment, estimated to have remained at 65.5 billion KRW last year, are projected to increase to 75 billion KRW and 128 billion KRW this year and next year, respectively.

Another positive factor is the significant increase in back-end process investments, which follow semiconductor front-end process investments. The proportion of sales from markers?equipment that displays characters, shapes, barcodes, etc., on semiconductor surfaces?and other high-margin equipment is also expected to rise. Markers are EOTechNix's core equipment and hold a 95% share of the global market. Sales in this sector are expected to reach 152 billion KRW this year, a 74% increase compared to the previous year.

Furthermore, the adoption of laser sources is increasing, and government subsidies for national projects have been positively evaluated.

Accordingly, Hi Investment & Securities forecasts that EOTechNix will achieve consolidated sales of 399.5 billion KRW and operating profit of 72.7 billion KRW this year, representing increases of 23% and 89%, respectively, compared to the previous year. Myungseop Song, a researcher at Hi Investment & Securities, explained, "Even considering the possibility of a downturn in semiconductor back-end process investment, EOTechNix's performance next year is expected to continue a stable growth trend. If there is no delay in reflecting sales in the fourth quarter this year, the results could exceed expectations even further."