On the 21st, BNK Investment & Securities evaluated that Isu Petasys is improving its profitability and that demand related to artificial intelligence (AI) is becoming stronger. They maintained a 'Buy' investment rating and a target price of 39,000 KRW.
Isu Petasys recorded sales of 173.3 billion KRW in the fourth quarter of last year, a 5% increase compared to the same period the previous year, while operating profit decreased by 64% to 11 billion KRW. Sales met market expectations, but operating profit fell short by 34%.
Minhee Lee, a researcher at BNK Investment & Securities, explained, "We estimate that Isu Petasys' headquarters operating profit margin in the fourth quarter of last year was 6.8%, below the initially expected 9.0%. This was due to ongoing costs related to the expansion preparation of the 4th factory."
However, this year, Isu Petasys is expected to show improved profitability and continuous growth in order intake, leading to performance improvement. The researcher said, "The order volume for multi-layer circuit boards (MLB) for data centers from the largest customer, a North American cloud service provider (CSP), remains steady. Additionally, orders for MLBs for AI accelerators from North American graphics processing unit (GPU) customers are expected to gradually increase this year and are projected to double in the second half compared to last year."
He added, "Unlike the sluggish general IT demand, AI-related demand has been strengthening since the beginning of the year. Considering the future performance direction and demand outlook, we expect additional gains after a period of adjustment."
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