NH Investment & Securities announced on the 9th that it maintains a 'Hold' rating and a target price of 31,000 KRW for Dongjin Semichem. Dongjin Semichem's current stock price, based on the previous day's closing price, is 33,100 KRW, which is higher than the target price.
Dongjin Semichem's Q4 results for last year, announced the previous day, showed sales of 373.3 billion KRW, operating profit of 58.2 billion KRW, and net profit of 26.8 billion KRW. Sales and operating profit slightly decreased compared to the same period last year, while net profit plunged by 50%.
NH Investment & Securities expects that due to the slowdown in the memory semiconductor market, investment reduction and production cuts will become more pronounced starting from the first quarter of this year. Currently, NAND production companies hold inventory exceeding 15 weeks, which is a very high level.
To reduce such inventory, memory companies have been actively expanding production cuts since the beginning of this year. This trend is expected to continue through the first half of the year due to the economic slowdown. NH Investment & Securities estimates Dongjin Semichem's sales for Q1 this year to be 294.9 billion KRW, down 21% from the same period last year, and operating profit to be 32.4 billion KRW, down 44%.
Do Hyunwoo, a researcher at NH Investment & Securities, said, "It is expected to take some time before the market's anticipated mass production use of Dongjin Semichem's next-generation product, EUV photoresist, increases significantly," adding, "The development of next-generation technologies such as metal oxide resists and dry resists, which replace existing products, also poses a risk factor for the company."
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