[Click eStock] "Hana Materials Expected to Achieve Stepwise Growth... Target Price Raised"

Component Demand Rises on Sector Recovery
Strong First-Quarter Results Validate Growth

On July 22, Shinhan Investment & Securities raised its target price for Hana Materials to 83,000 won from the previous 58,000 won while maintaining a ‘buy’ recommendation. The firm also cited Hana Materials as one of Korea’s top component makers to watch in the second quarter.

Kangho Oh, an analyst at Shinhan Investment & Securities, commented, “The recovery in the semiconductor sector has led to increased demand for key components such as SiC and rings, driving performance. Hana Materials already proved its strong growth with robust first-quarter results.” He added, “The company is expected to enter a phase of formulaic growth.” For its target price calculation, Shinhan Investment applied the two-year average PER (price-earnings ratio) from previous growth cycles, raising it by 7% from the earlier estimate.

The company’s annual operating profit is now forecast at 94.4 billion won, up 32% from the previous estimate. Oh noted, “The key drivers are increased demand and improved utilization rates thanks to the recovery in NAND and DRAM markets, which are supporting growth. Profit improvement has been validated along with top-line expansion.” Last year, Hana Materials posted an operating margin of 18.3%, rising to 22.8% in the first quarter of this year. The analyst expects the operating margin to reach up to 25% this year due to operational leverage from higher sales.

As factors supporting stepwise growth, Oh pointed out, “For semiconductor component suppliers, improved customer utilization and increased capital investment are core factors for strengthening earnings. Leveraging product competitiveness in Si and SiC, further profitability improvements are anticipated. Looking at past performance trends, expectations of stepwise growth have become more pronounced.”

The company’s utilization rate trend is also receiving positive reviews. Hana Materials’ capacity utilization rate increased from 56% in the first quarter of last year to 68% in the third quarter. Oh projected, “Given the market conditions in the second half, utilization rates could reach 85–90%, and considering product upgrades and demand, further capacity expansions are also highly likely.”

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