[Click e-Stock] "Asterasys, Intensifying Domestic Competition... Target Price Lowered"

Target Price Lowered by 11% from Previous Level

On August 19, Korea Investment & Securities reported that domestic competition for Asterasys is intensifying, and accordingly, the company lowered its target price from 14,000 won to 12,500 won. The investment rating was maintained at 'Buy'.

Kang Sion, a research analyst at Korea Investment & Securities, stated, "We are lowering the target price by 11% compared to the previous level," explaining, "This is a result of revising down our earnings per share (EPS) estimates for this year and next year by 11% and 13%, respectively, to reflect the intensifying domestic competition."

In the second quarter of this year, Asterasys recorded sales of 10.3 billion won, up 33% year-on-year, and operating profit of 3.8 billion won, up 57%. Kang noted, "Sales were 3.4% below consensus (the average of brokerage forecasts), and operating profit was 5.3% below consensus, but since the consensus is based on a limited number of estimates, direct comparison is of limited significance." He added, "Strong sales of the high-frequency (RF) device 'Coolphase' continued to drive equipment performance in the second quarter. In particular, Coolphase exports, which were previously centered on Brazil, have expanded this year to Southeast Asian regions such as Taiwan and Indonesia, with these results becoming more pronounced starting in the second quarter."

Coolphase, considered the key driver of this year's performance, is reportedly progressing smoothly. Kang commented, "With the growth of 'Liftera' slowing, Coolphase has become a crucial factor for this year's results, especially as exports are outperforming expectations." He continued, "In the second quarter, Coolphase equipment sales amounted to 35 units domestically and 220 units for export. While domestic growth has been slower than anticipated at the beginning of the year due to intensified competition in the RF segment, strong export results in Brazil and Southeast Asia are offsetting this, allowing for continued high growth."

Growth is expected to strengthen in the second half of the year. Kang forecasted, "Growth momentum will be reinforced in the second half, driven by Coolphase's entry into new markets such as Thailand, expanded sales of 'Coolsonic', and FDA approvals for RF and high-intensity focused ultrasound (HIFU) devices in the United States."