[Click eStock] "Wonik IPS Sales to Rebound from Q1 Low"

Samsung Securities Report

[Asia Economy Reporter Minji Lee] Samsung Securities maintained a buy rating and target price for Wonik IPS on the 9th, expecting sales growth from the first quarter as the bottom.

In the first quarter, Wonik IPS recorded sales of 208.7 billion KRW. Although the delivery timing of equipment continued to be delayed, reflecting the delay from the fourth quarter, the portion to be reflected in the first quarter was pushed to the second quarter, causing the overall performance to fall short of market expectations. Operating profit was 22 billion KRW, reflecting the exchange rate effect on overseas sales equipment.

Currently, shortages of major equipment parts are emerging, and some logistics issues are causing the overall line installation schedule to be delayed. In the case of Samsung Electronics' Pyeongtaek Plant 3, the delay is about three months on average compared to the plan.

Researcher Jongwook Lee of Samsung Securities explained, "Since most investors focus on changes in customer investment intensity, the equipment delay issue is neutral for Wonik IPS's stock price," adding, "It is more important how much the current market conditions can increase Wonik IPS's sales rather than whether Wonik IPS has actually delivered the equipment."

Sales are expected to reach 272.5 billion KRW in the second quarter. From the third quarter, sales related to Pyeongtaek Plant 3 will begin. Market share within Wonik IPS's customers is expected to further increase in DRAM 14nm and NAND 7th generation.

Researcher Jungwook Lee emphasized, "Investors' concerns are growing as the current situation shows both weak front-end IT demand and an expansion cycle of Samsung Electronics' investment simultaneously," adding, "For the investment expansion cycle to lead to investor enthusiasm, concerns about weak demand need to be resolved first, and risks are expected to be settled around the third quarter when reopening and peak season demand coincide."