[Click e-Stock] "ISC: Data Center Growth and New Businesses Drive Target Price Up"

On December 31, Korea Investment & Securities maintained its "Buy" rating on ISC, stating, "Next year, ISC's revenue and operating profit are expected to show the strongest growth among global peers." The firm also raised its target price by 29.5% from the previous level to 123,000 won.

On this day, Park Sanghyun, a researcher at Korea Investment & Securities, explained, "Profit growth driven by high exposure to data centers will continue in the fourth quarter, and the performance of the equipment and materials business will be fully reflected."

The company expects fourth-quarter operating profit to reach 18.9 billion won, up 151.4% from the same period last year, exceeding the market consensus by 11.5%. Park noted, "Cumulative revenue from data center-related businesses in the first to third quarters increased by 57.1% year-on-year, indicating robust competitiveness in silicon rubber sockets for data center applications."

He added, "The specific applications within data centers are diversifying from graphics processing units (GPUs) to application-specific integrated circuits (ASICs) and more. Considering that major North American tech companies are raising their capital expenditure plans, we do not expect the usual seasonal slowdown in the fourth quarter this year."

The new back-end semiconductor business is also showing rapid growth. Park projected that the proportion of equipment and materials within total sales will increase from about 10% this year to over 15% next year.

He continued, "This year, the combined revenue from new businesses such as module testers, burn-in testers, chemicals, and semiconductor transfer equipment (EFEM) is expected to be around 23 billion won, accounting for about 10% of total sales. In May, SK Group merged ISC, Tech Dream, and iSemi to internalize back-end technology. The equipment and materials business is expected to continue stable growth with strategic support from the group," he emphasized.