[Click eStock] Wonik IPS, Another Low Price Buying Opportunity

On the 10th, BNK Investment & Securities maintained a buy rating and a target price of 40,000 KRW for Wonik IPS. Despite reduced capital expenditures by client companies and deteriorating performance, the stock price hit bottom in the fourth quarter of last year. As semiconductor supply chain inventory peaked and recently returned to normal levels, the stock price has risen nearly 60% from its bottom and is currently in a correction phase. Minhee Lee, a researcher at BNK Investment & Securities, stated, "Since the sluggish consumer economy is still delaying industry improvement, we maintain a view of the stock price trading within a range, but it is time to look for buying opportunities again in the mid-20,000 KRW range."

Due to a sharp decline in sales, the operating loss in the first quarter of this year was 10.7 billion KRW, generally in line with our estimate of 9.6 billion KRW but below the market consensus of 1.9 billion KRW. Sales amounted to 150.4 billion KRW (-28%), significantly below the expected 182.3 billion KRW, as revenue recognition was deferred due to delays in client equipment setup. Semiconductor sales recorded 136.2 billion KRW (-11%), mainly related to Samsung Electronics P3 DRAM and Foundry investment progress.

With the recognition of previously deferred sales, second-quarter sales are expected to increase to 197 billion KRW (-1.4%), and operating profit margin is expected to turn positive at 3.4%. Semiconductor sales are expected to account for the majority. The researcher noted, "Although the investment schedules of overseas clients remain uncertain, there seems to be no reason yet to change the existing annual sales and operating profit forecasts for this year."