[Click eStock] PSK's Treasury Stock Trust Contract Shows 'Willingness to Boost Stock Price'

[Asia Economy Reporter Lee Seon-ae] Semiconductor equipment supplier PSK has announced the signing of a treasury stock acquisition trust contract. The contract amount is 20 billion KRW, starting on September 27, 2021, and ending on March 26, 2022. This represents about 3.7% of the market capitalization of 545.6 billion KRW. PSK's largest shareholder, PSK Holdings (with a 32.14% stake), also announced the signing of a treasury stock acquisition trust contract worth 10 billion KRW, representing about 4.0% of its market capitalization of 251.2 billion KRW.

On the 28th, Kim Kyung-min, a researcher at Hana Financial Investment, stated, "The fact that PSK and PSK Holdings have each signed treasury stock trust contracts carries various implications," adding, "It expresses the company's intention to boost its stock price and symbolically represents overcoming negative factors affecting small and mid-cap stocks."

Although the contract amounts are not large relative to each company's market capitalization, they are judged to be positive for the stock price. This is because it is effectively the first treasury stock acquisition trust contract since the corporate split in May 2019, showing a clear intention to support the stock price. In PSK's case, the stock price fell from 47,800 KRW on August 9 to 34,550 KRW on September 16 over the past three months. The cause of the price decline was concerns about the visibility of domestic production of new semiconductor equipment. Regarding the Bevel Etch equipment, which was the subject of concern, customer evaluations are progressing smoothly. Development began in 2017, and it provides solutions for Edge Engineering in devices below 20nm.

Over the past three months, small and mid-cap semiconductor stocks in Korea have underperformed. The KRX Semiconductor Index posted a three-month return of -9.3%, lagging behind the KOSPI (-5.1%) and KOSDAQ (+2.2%). The direct factor negatively affecting small and mid-cap semiconductor stocks was the possibility of a decline in memory semiconductor contract prices in Q4 2021. Despite the recent stock price decline, PSK is judged not to have lost its investment appeal. It remains representative as a non-memory semiconductor front-end equipment company, and its roadmap for expanding sales to overseas customers remains unchanged. Since the corporate split was completed in 2019, PSK has actively pursued domestic production of semiconductor equipment and diversification of customers, including investment in the construction of the Pangyo R&D Campus (announced on June 15, 2021).

Researcher Kim emphasized, "Announcing a treasury stock acquisition trust contract at this time is symbolically very meaningful."