[Click eStock] "TCK, Stock Rebounds with Large-Scale Expansion This Year... Top Semiconductor Pick"

[Asia Economy Reporter Kwon Jaehee] Kiwoom Securities maintained a 'Buy' rating on TC K and set a target price of 170,000 KRW on the 22nd.

TC K's preliminary results for the first quarter of this year showed sales of 77.8 billion KRW and operating profit of 29.1 billion KRW. This represents increases of 23% and 22% respectively compared to the same period last year, exceeding market expectations.

Park Yooak, a researcher at Kiwoom Securities, analyzed, "It is understood that the Silicon Carbide Ring (SiC Ring) segment recorded its highest-ever performance due to the increased operating rates of Samsung Electronics' Pyeongtaek Phase 2 and SK Hynix's M16 plant."

Additionally, new equipment expansions are expected to be carried out in the first half of this year at Samsung Electronics' P3, SK Hynix's M15, and Kioxia's Y7 plants, suggesting that TC K's quarterly performance growth momentum will resume starting from the first quarter. Sales by business segment are estimated at 65.8 billion KRW for SiC Ring and 10.9 billion KRW for the Graphite segment.

TC K's second-quarter results are also expected to achieve record highs. TC K is projected to record sales of 82.9 billion KRW and operating profit of 31.4 billion KRW in the second quarter, marking increases of 25% and 21% year-on-year, respectively. This is due to the full-scale start of Samsung Electronics' P3 and the rising operating rate of SK Hynix's M16, with SiC Ring shipments expected to increase by 6% compared to the previous quarter.

This year's annual performance is also expected to exceed market forecasts, with sales of 335.2 billion KRW and operating profit of 126.8 billion KRW. Sales by business segment are projected at 283.9 billion KRW for SiC Ring and 47.9 billion KRW for Graphite, representing increases of 25% and 17% year-on-year, respectively.

Researcher Park stated, "TC K's SiC Ring is expected to record significant performance growth this year, benefiting from the operation of customers' new plants and the increase in 3D NAND layer counts. To respond to strong demand, large-scale expansions will likely be necessary, which is expected to lead to a strong rebound in TC K's stock price that has been suppressed until now."

He added, "We continue to recommend TC K as the top pick in the semiconductor sector and suggest using any stock price corrections caused by global economic uncertainties as opportunities to increase holdings."