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Wonik IPS headquarters view. (Photo= Wonik IPS) |
[Alpha Biz= Reporter Kim Sangjin] Kiwoom Securities lowered its target price for Wonik IPS from 43,000 KRW to 33,000 KRW on December 5, citing the reduction in client capital expenditures (CAPEX) that is expected to negatively impact next year's earnings. The firm maintained its "Buy" rating.
Kiwoom Securities forecasts a downward revision of memory semiconductor CAPEX for next year, noting that delays in HBM3E mass production validation and weak buyer demand will slow down the expansion of high-bandwidth memory (HBM) by memory chipmakers. The expansion approach is expected to shift from introducing new equipment to utilizing existing DDR4 equipment.
The firm also pointed out that in NAND, most CAPEX will be spent on upgrading existing equipment rather than on new equipment. It also expects a steeper-than-expected decline in Samsung Foundry's utilization rates, making it difficult to pursue new investments in the short term.
Kiwoom Securities estimates Wonik IPS' revenue and operating profit for next year to grow by 18% and 302%, respectively, to 884.5 billion KRW and 72 billion KRW.
Kiwoom added that SK hynix's memory process transition will improve semiconductor equipment performance, and cost-saving efforts in the display sector will positively impact overall profitability. However, changes in client demand could lead to variations in the timing of process transitions, potentially increasing quarterly earnings volatility for Wonik IPS.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
