[Click eStock] KC Tech Lowers Target Price... Considering Samsung Electronics Investment Schedule

[Asia Economy Reporter Junho Hwang] Cape Investment & Securities has lowered the target price of KC Tech to 21,000 KRW per share. Although the second-quarter performance this year was good, a decline in earnings is expected due to the absence of Samsung Electronics' DRAM investment.

KC Tech recorded sales of 93.3 billion KRW and an operating profit of 17.5 billion KRW in the second quarter of this year. In the semiconductor equipment business, equipment sales related to Samsung Electronics' P2 investment and some deferred sales from the previous quarter were recognized. However, due to the delay in Samsung Electronics' P3 investment, sales decreased by 7.4% from the previous quarter to 34.9 billion KRW.

The outlook for the third quarter of this year is also somewhat bleak. Although Samsung Electronics will continue P3 NAND flash investment in the third quarter, KC Tech's high proportion of DRAM equipment means the benefit intensity is weak. Additionally, due to the absence of DRAM investment, third-quarter sales are expected to be 78.6 billion KRW with an operating profit of 13.2 billion KRW.

Seongsun Park, a researcher at Cape Investment & Securities, stated, "We lowered the target price to 21,000 KRW per share reflecting the downward earnings forecast. However, KC Tech's stock price has already partially reflected these concerns."