[Click eStock] "Lotte Vacuum, Expected Benefits from Solar, Semiconductor, and Display Investments Next Year"

Yuanta Securities analyzed on the 5th that LOT Vacuum is expected to benefit from investments in the semiconductor, solar power, and display sectors next year. No investment opinion or target price was provided.

LOT Vacuum recorded sales of 232.2 billion KRW in the first half of this year, a 45.8% increase compared to the previous year. Operating profit for the same period also rose by 120.4% to 33.8 billion KRW. Myungjun Kwon, a researcher at Yuanta Securities, stated, "Despite the sluggish conditions in major downstream industries in the first half, stable sales from semiconductor vacuum pumps due to increased application processes and growth in vacuum pump sales to Chinese solar equipment companies, which began in earnest in 2021, contributed to this performance."

He also expects LOT Vacuum to achieve high growth in the second half of this year compared to the previous year. He said, "The order backlog was 36.3 billion KRW at the end of 2021 and 147.3 billion KRW at the end of 2022," adding, "As of the end of Q2 this year, it sharply increased to 202.7 billion KRW. Considering that it generally takes about two quarters from order to revenue recognition, the visibility of performance improvement is high."

In particular, this growth trend is expected to continue next year. He said, "Sales growth is expected to continue next year due to ongoing solar investments in China," and added, "Growth is also anticipated from revenue recognition of vacuum pumps for semiconductors and displays related to investments in Samsung Display, Samsung Electronics Pyeongtaek Plant 4, and the Taylor plant in the U.S."

He explained, "The application processes have expanded from mainly deposition processes in the past to etching, diffusion, and others since 2020," and added, "Even with the same investment scale from customers, LOT Vacuum's sales are expected to increase." He further noted, "The company is also expanding into semiconductor back-end processes and secondary batteries, which is expected to act as a factor for both performance growth and valuation upgrades."