HPSP Says It Is "Still Undervalued"... Target Price Tops 70,000 Won

[Financial News] On the 28th, Daishin Securities maintained its "Buy" rating on HPSP, saying that earnings growth would continue as semiconductor capital expenditures expand and the company diversifies its customer base. The brokerage raised its target price from 63,000 won to 71,000 won. 
On the 28th, Daishin Securities analyst Hyungkeun Ryu said, "The impact of higher capital expenditures across the semiconductor supply chain is being reinforced by the positive shift toward customer diversification, and we expect differentiated growth over the next two years." He added, "Given the strengthening earnings growth, expectations for new equipment, and inorganic growth opportunities supported by abundant cash flow, the current share price remains undervalued."
He identified equipment for NAND flash memory as the key growth driver. Ryu forecast, "Shipments of equipment for NAND flash memory are expected to increase 70% year on year in 2027." He added, "Together with the effect of higher average selling prices resulting from customer diversification, it will become a key catalyst driving company-wide growth."
He also viewed the expanded use of high-pressure annealing equipment, driven by increasing NAND layer counts, positively. "As the number of layers in 3D NAND expands to more than 300, the practical benefits of using high-pressure annealing equipment have increased," he said. "We estimate that virtually all NAND manufacturers have decided to adopt the equipment and forecast that it will be supplied to five customers in 2027."
Customer expansion is also expected in DRAM. Ryu said, "We estimate that HPSP currently has two customers, and that the number will rise to three once DRAM 1d development is completed." He added, "Two of the three DRAM manufacturers are expected to use high-pressure annealing equipment in the 1d process, increasing the visibility of further upward revisions to the earnings outlook."
Demand for central processing units (CPU) was cited as an additional growth factor in the logic and foundry businesses. He noted, "Growth in related equipment sales will resume as capital expenditures in the logic and foundry industries increase." He added, "The worsening CPU shortage caused by Agentic AI is a development that could lead to an expansion of new orders."
Regarding concerns about competitors entering the market, Ryu said, "Even if new entrants become visible, their impact on market share through 2028 will be within 10%." He added, "Considering the supply record over the past five years and each customer's equipment adoption plans, the actual impact is expected to be minimal, so excessive concern is unwarranted."


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