[Click eStock] "Wonik QnC, Continued Earnings Growth... Strong Performance Expected in Early Next Year"

[Asia Economy Reporter Lee Jung-yoon] BNK Investment & Securities maintained a buy rating and a target price of 34,000 KRW on Wonik QnC on the 17th, stating that despite the semiconductor industry downturn, the company continues to achieve stable earnings growth through a diverse customer base across various sectors and mergers and acquisitions (M&A).

Wonik QnC's consolidated sales for the third quarter of this year reached 203.9 billion KRW, up 29% year-on-year, and operating profit increased by 39% to 37.1 billion KRW. These figures exceeded market consensus estimates by 8% and 5%, respectively.

The strong performance was driven by the quartz raw material supply subsidiary Momentive, which recorded sales of 92.8 billion KRW, a 62% increase compared to the same period last year, and by increased orders from North American etching equipment customers, boosting quartzware sales. The operating margin fell by 0.5 percentage points from the previous quarter to 18.2%, attributed to a temporary decline in profitability due to changes in Momentive's product mix.

Sales for the fourth quarter are expected to decline to 193.3 billion KRW, a 19% increase compared to the same period last year, due to the seasonal downturn, and the operating margin is projected to be 8.2%, affected by performance bonus payments. Minhee Lee, a researcher at BNK Investment & Securities, explained, "From the fourth quarter, the newly acquired quartz crucible manufacturer Costec will be included in the consolidated results, reflecting two months of November and December. Meanwhile, sales to the domestic largest customer P3 line for DRAM and Logic are expected to begin in the first quarter of next year, raising expectations for strong performance in the first half of next year."