[Click eStock] "AP System, Historically Undervalued Despite Solid Performance"

NH Investment & Securities analyzed on the 20th that AP System's stock price is excessively undervalued despite solid performance and a stable financial structure. No investment opinion or target price was provided.

AP System is a supplier of display process equipment, including ELA and LLO devices, as well as semiconductor equipment related to heat treatment such as related parts and RTP. In the display sector, it holds an overwhelming global No. 1 position in these devices, and in semiconductors, it is expanding its market share and portfolio. Going forward, stable financial structure, improvement in the display industry conditions, and semiconductor expansion are expected to enable structural growth.

Researcher Lee Gyu-ha of NH Investment & Securities said, "The display equipment and parts business is expected to achieve stable mid- to long-term growth, supported by the increasing penetration of OLED," adding, "The rising OLED fab utilization rates and investment expansion by Greater China display companies are also positive direct benefits."

He emphasized, "In semiconductor equipment, the company is diversifying customers to domestic and Greater China firms, and within these customers, it is expanding market share through short lead times and price competitiveness that is over 30% cheaper. In the mid- to long-term, as it is conducting research and development (R&D) on next-generation semiconductor packaging such as dicing and debonder with global semiconductor and packaging companies, it is expected to stand out in semiconductor equipment as well."

NH Investment & Securities forecasted this year's operating profit to be 49.9 billion KRW, a 17% decrease from the previous year. He predicted, "Next year, operating profit will reach 61 billion KRW, driven by increased OLED fab utilization and investments in foldable and LTPO transitions."

He stressed, "The current stock price is at a historical valuation low with a price-to-earnings ratio (PER) of 4.7 times based on 2025 earnings per share. Considering the financial stability with net cash exceeding 100 billion KRW and annual operating cash flow generation capacity of over 50 billion KRW, as well as the expansion of OLED penetration and diversification into advanced semiconductor equipment, the current stock price is in an excessively undervalued range."