[Click eStock] Hanamicron, Mid- to Long-Term Growth Momentum to Watch

[Asia Economy Reporter Lee Seon-ae] Investment advice has been raised to pay attention to the mid- to long-term growth momentum of Hanamicro.

According to Korea Investment & Securities on the 24th, Hanamicro's stock price volatility increased recently due to rumors related to back-end process contracts. However, considering that the company's main business is at the early stage of shifting from conventional-focused to non-memory testing, and that the recent issues have limited impact on fundamentals, the mid- to long-term growth momentum is still deemed valid. Even without reflecting the earnings estimates of the Vietnam subsidiary, the current stock price is at a price-to-earnings ratio (PER) of 13.5 times based on 2022 earnings, which is not high compared to other companies. Accordingly, Ye-rim Lim, a researcher at Korea Investment & Securities, maintained a buy rating on Hanamicro with a target price of 24,000 KRW (applying a 2022 price-to-book ratio (PBR) of 3.5 times).

There is a prejudice that package testing has a lower profit margin than wafer testing. This is because package testing is conducted on a chip basis, which can cause greater variability in utilization rates compared to wafer testing. However, if the utilization rate of package testing is maintained steadily, there is no difference in profit margin compared to wafer testing. Taiwan's test-specialized OSAT KYEC mentioned in a conference call that if the utilization rate is steady, wafer and package testing can record similar levels of GPM (KYEC standard 35%).

Researcher Lim predicted, "Along with the recovery of Exynos demand, Hanamicro's package testing will also maintain a steady utilization rate, and next year's test profit margin will reach 20%."