[Click eStock] "Soulbrain, Lowered Short-term Earnings Expectations... Target Price Downgraded"

Shinhan Investment Corp. has lowered the target price for semiconductor specialist Solbrain to 260,000 KRW.

Kim Hyung-tae, Senior Researcher at Shinhan Investment Corp., stated, "Due to the weaker-than-expected memory market in Q4 2024, the utilization rate of client companies declined," adding, "Reflecting inventory adjustments and delayed recovery in utilization rates expected to continue through the first half, we have revised earnings estimates and lowered the target price."

Solbrain recorded sales of 220.8 billion KRW in Q4 last year, a 0.4% increase from the previous quarter, and operating profit rose 7% to 42.6 billion KRW during the same period.

Senior Researcher Kim explained, "In 2025, client companies are expected to maintain conservative production capacity (Capa) management policies through the first half, limiting short-term earnings recovery visibility, but gradual utilization rate recovery is anticipated from the second half."

He added, "There is potential for foundry restructuring by client companies and business normalization after June, and expectations for delivery of acetic acid-based etching solutions remain valid," further stating, "Recently, a top-tier North American equipment company unveiled molybdenum-based atomic layer deposition (ALD) equipment, and its commercialization is expected to secure growth momentum as a next-generation material."

Senior Researcher Kim forecasted, "Despite short-term earnings weakness, the current stock price is near the lower end, and valuation attractiveness is expected to emerge depending on the pace of market recovery."