[Click eStock] "Park Systems, Disappointing Q3 Earnings"

Favorable Order Environment Supports Growth Momentum Next Year
Samsung Securities Maintains Park Systems Target Price at 180,000 Won

[Asia Economy Reporter Gong Byung-sun] Park Systems is expected to record somewhat disappointing results for the third quarter of this year. However, a favorable order environment is anticipated to continue next year as well.

On the 25th, Samsung Securities estimated Park Systems' sales for the third quarter of this year at 21.3 billion KRW, a 30.2% increase compared to the same period last year, and operating profit at 4.7 billion KRW, a 16.9% increase over the same period. These figures fall short of the respective market consensus by 27.1% and 40.9%.

Delays in converting purchase orders led to the poor performance estimates. There was a performance deferral of about 5 billion KRW from the second to the third quarter. It is estimated that a performance deferral close to 10 billion KRW occurred from the third to the fourth quarter, including orders and evaluation equipment. Uncertainty regarding the conversion of purchase orders still exists at the end of the year.

Researcher Bae Hyun-gi of Samsung Securities explained, "The possibility of such a performance shock and the adjustment of performance expectations have been reflected in the recent stock price decline," adding, "At this point, attention should be paid more to the fundamental changes and the expansion of new applications that will appear next year rather than this year's performance."

(Provided by Samsung Securities)

Although the second half of this year was sluggish, growth is expected to be valid next year due to the continued favorable order environment. It is estimated that the order backlog for the third quarter of this year was secured at the mid-30 billion KRW level, similar to the second quarter. Additionally, hybrid equipment has also started to contribute to performance. It is known that about four companies are currently testing the hybrid equipment, which is expected to be partially reflected in the sales of the fourth quarter of this year.

Researcher Bae forecasted, "Diversification of applications, inspection roles in extreme ultraviolet (EUV) masks, expansion toward post-process, and contributions of equipment for displays will fully emerge next year."

Accordingly, Samsung Securities maintained its investment opinion of "Buy" for Park Systems and a target stock price of 180,000 KRW. The closing price on the 22nd was 109,000 KRW.