[Click eStock] ISC, Stock at Historically Undervalued Level... "Buying Opportunity at Low Price"

[Asia Economy Reporter Ji-hwan Park] Shinyoung Securities on the 6th stated that ISC is showing a clear improvement in profitability due to the effect of new products, and especially expects benefits from DDR5 starting next year, recommending a 'Buy' rating with a target price of 38,000 KRW.

Seonghun Lee, a researcher at Shinyoung Securities, emphasized, "This year, sales of new non-memory sockets have started, and the market share of rubber sockets has increased," adding, "From the second quarter, rubber sockets were used for the first time in CPUs, and new AP rubber sockets were delivered to clients, significantly improving the gross profit margin." As a result, the proportion of non-memory sales rose from 52% at the end of last year to over 60% currently.

In particular, it is expected that sales of DDR5 sockets and FCCL will become full-scale starting next year. It is anticipated that from the first quarter of next year, DDR5 sockets, which have a higher selling price compared to DDR4, will be delivered. ISC, which holds a significant share of memory sockets for domestic clients, is expected to be the biggest beneficiary among related companies.

Researcher Lee stated, "The price-to-earnings ratio (PER) of major peer companies is around 14 to 20 times, and considering that the PER reached up to 40 times during 2014-2015 when DDR4 benefits were fully realized, 20.6 times does not seem excessive." Considering that stock prices rose from 2014 when DDR4 sockets were reflected in performance, it is analyzed that the current time, just before DDR5 sockets are reflected in performance, is an appropriate buying opportunity.

He added, "Although the stock price has risen more than twice compared to the beginning of the year, this is interpreted as a price reflecting this year's performance, and the PER is historically undervalued," concluding, "There appears to be sufficient room for further growth."