[Click eStock] Isu Petasys, AI Demand Increase Expected... Target Price Raised to 66,000 KRW

Meritz Securities raised the target price for Isu Petasys to KRW 66,000 on the 19th, expecting an increase in operating profit due to growing demand for artificial intelligence (AI). The investment rating was maintained at 'Buy.'

Yang Seung-su, a researcher at Meritz Securities, stated in a report on the same day, "Our company anticipates a shortage and additional expansion of the multi-layer board (MLB) currently in mass production by Isu Petasys due to increased AI demand." He added, "This is because the visibility has improved through the potential expansion of direct sales by entering the NV-oriented GB200 OAM substrate market, the full-scale mass production of 800G substrates following the arrival of the Ethernet-based network investment cycle, and an increase in volume for Company G, which we have continuously emphasized."

Researcher Yang explained that the simultaneous P and Q cycles have already begun and expectations continue to rise, leading to a 6.2% upward revision of the 2025 EPS.

Meritz Securities raised Isu Petasys' operating profit estimate for this year from KRW 24.1 billion to KRW 26.2 billion, an 8.7% increase. This figure exceeds the current market consensus (KRW 23.9 billion) by 9.4%. Yang explained, "The reason for the upward revision of operating profit is due to stronger-than-expected average selling price (ASP) increases caused by specification upgrades, recovery in network-related volumes, and a high exchange rate."

Additionally, the Chinese subsidiary, which showed strong performance recovery in the first quarter, is also expected to maintain favorable shipment conditions.

Actual demand continues to increase. Researcher Yang stated, "In 2023, Google's TPU (Tensor Processing Unit, AI-dedicated semiconductor) shipments surpassed 2 million units, and related sales for Isu Petasys reached KRW 150 billion."

He further added, "Given that the global leader Apple has used TPU, we believe the training competitiveness of TPU has been proven," and "Starting with Apple, it is highly likely that many external companies will increasingly utilize TPU in building their own AI models."

Accordingly, the high-value TPU models for Company G, from the currently mass-produced TPUv5 to the future TPUv6, are significant in that Isu Petasys is responding as a solvent vendor.