[Click e-Stock] "Soulbrain: Mid- to Long-Term Growth and KOSDAQ Policy Benefits... Target Price Raised"

Expansion of Etching Solutions for Foundries
and Anticipated Recovery in NAND Demand

On January 23, NH Investment & Securities announced that it would raise its target price for Soulbrain, citing expectations for expanded mid- to long-term growth and the anticipated benefits from policies to revitalize the KOSDAQ market.

Yang Junghyun, a researcher at NH Investment & Securities, stated in a report released that day that the company is maintaining its "Buy" rating on Soulbrain and raising the target price to 385,000 won, up from the previous level. Yang explained, "While there is no change in earnings forecasts, we have raised this year's expected price-to-earnings ratio (PER) valuation to 20.4 times, considering expectations for expanded mid- to long-term growth, favorable fourth-quarter 2025 results compared to industry peers, and the benefits from KOSDAQ revitalization policies."

Soulbrain's fourth-quarter 2025 results are projected to show sales of 243.6 billion won (a 12.5% increase year-on-year and a 1.0% increase quarter-on-quarter) and operating profit of 39.5 billion won (an 8.6% increase year-on-year). Yang analyzed, "Thanks to a gradual increase in utilization rates, performance growth centered on semiconductor materials is continuing smoothly, signaling that the company is passing through the bottom."

Full-fledged earnings growth is expected to become visible from the second half of this year. This is because the new DRAM fabs, P4 and M15X, will begin full-scale operations and the transition to NAND will be completed. In particular, the recovery of advanced process competitiveness among foundry clients and the mid- to long-term increase in NAND demand were cited as key drivers of the company's growth potential.

Yang noted, "With Exynos being adopted in Galaxy S, Samsung Group's bargaining power has increased, and as a result, manufacturing discussions are underway with Qualcomm and foundry clients." He added, "The likelihood of realizing a scenario in which acetic acid-based etching solutions are supplied for Exynos, Tesla, Qualcomm, and HBM is increasing." Furthermore, as Nvidia seeks to resolve inference bottlenecks using SSDs, the mid- to long-term growth potential for NAND is also on the rise.

From a mid- to long-term perspective, growth is expected to be sustained after 2027 through the supply of materials for V9-10, expansion of acetic acid-based etching solutions, and responses to Taylor fab. Yang added, "Expectations for expanded supply of etching solutions for foundries and for KOSDAQ revitalization policies are likely to be reflected in the share price before actual performance, and considering the company's clear competitive advantages over industry peers, we are maintaining our Buy rating."