"Rapid Growth Projected Amid Semiconductor Boom"...The OOO Attracting Attention From Securities Firms [Click e-Stock]

Shinhan Investment & Securities Sets LTC Target Price at 60,000 Won
"The Optimal Choice to Benefit from Facility Investment Expansion"

On June 4, Shinhan Investment & Securities initiated coverage on LTC, a semiconductor materials company, projecting rapid growth amid the semiconductor industry boom. The firm set a target price of 60,000 won and assigned a "Buy" investment rating.

Park Hyunwoo, Senior Researcher, and Kim Yesung, Researcher at Shinhan Investment & Securities, stated, "Despite concerns over a supply-demand imbalance following the overall stock price increases in the materials, parts, and equipment (so-called 'SoBuJang') sector in the first half of the year and the launch of leveraged ETFs, LTC’s differentiated earnings trajectory and attractive valuation remain intact. The company is the optimal choice to benefit from the expansion of facilities investment (CAPEX) and the trend toward higher-layer NAND during the semiconductor boom."

LTC’s sales and operating profit for this year are projected at 432.9 billion won (up 40% year-on-year) and 65 billion won (up 119%), respectively. The LTCAM (materials) division’s operating profit is expected to reach 24.8 billion won (up 30%) this year. This is because its client plans to increase the share of 300-layer NAND from 15% last year to 50% of domestic production by the end of the year. As LTC is the exclusive supplier of High Selectivity Phosphoric Acid (HSP), strong growth is expected in tandem with the shipment of 321-layer NAND. Next year, a significant increase in materials revenue is also anticipated due to a rise in utilization rates at new fabs (semiconductor manufacturing plants).

The LSE (equipment) division’s operating profit is expected to reach 42.3 billion won (up 255%). LTC plans to supply cleaning equipment to SK hynix’s M15X (Cheongju) plant this year and Y1 (Yongin Cluster) plant next year. As both plants are new fabs (manufacturing plants), the number of equipment supplied is expected to increase by 35% and 53% year-on-year in 2026 and 2027, respectively. Shinhan Investment & Securities commented, "As the investment cycle lengthens, it is a period of upward earnings momentum. Considering the need for process stability and security in cleaning, the likelihood of vendor replacement is limited."

On a separate basis, as LTC expands its business scope from displays to semiconductor materials, a turnaround to profitability is expected by 2027. Shinhan Investment & Securities noted that glue strippers (debonding materials) are currently undergoing tests for domestic memory manufacturers’ high-bandwidth memory (HBM4), with results expected within the year. If testing in the first half of this year is successful, some revenue could be recognized in the second half.

This content was produced with the assistance of AI translation services.