[Click eStock] Wonik IPS, Clear High-Low Pattern in Next Year's Earnings

[Asia Economy Reporter Lee Seon-ae] Daishin Securities announced on the 8th that it maintains a buy rating and a target price of 46,000 KRW for Wonik IPS. The target price is based on applying a price-to-book ratio (PBR) of 2.4 times to the leading book value per share (BPS) of 2022.

Wonik IPS recorded sales of 373.3 billion KRW and operating profit of 64.9 billion KRW in the third quarter of 2021, meeting both the company's estimates and consensus. The semiconductor division posted 288 billion KRW, and the display division recorded 86 billion KRW.

Fourth-quarter sales are expected to be 207.9 billion KRW (-44% QoQ), with an operating loss of 16.5 billion KRW (turning to a loss QoQ). Some domestic and overseas display equipment deliveries have been deferred to 2022, leading to a downward revision from the company's previous estimates. Additionally, the fourth quarter is expected to reflect one-time expenses, causing an increase in selling and administrative expenses and resulting in a quarterly operating loss.

However, the company forecasts annual sales of 1.356 trillion KRW (+7% YoY) and operating profit of 197.7 billion KRW (+14% YoY) for 2022. The quarterly performance trend is expected to be low in the first half and high in the second half. Researcher Lee Subin of Daishin Securities explained, "Expectations for equipment orders in 2022 are mostly concentrated in the second half due to Samsung Electronics' Pyeongtaek Plant 3 (P3) and foundry investments in the United States, so sales are expected to increase as the year progresses." He added, "The company's market share within customers' processes is continuously expanding, so even if customers reduce their capital expenditures, the company is expected to achieve sales growth compared to competitors through market share expansion."