[Click eStock] "Doosan Tesna Earnings Expected to Improve on 'New Product' Effect"

"Results Expected to Rebound Starting in the Fourth Quarter"

Meritz Securities raised its target price for Doosan Tesna to KRW 169,000 from KRW 164,000 on October 13, while maintaining its "Buy" rating.

Kim Donggwan, an analyst at Meritz Securities, said of Doosan Tesna, "Despite weak short-term earnings, the production schedules for LPUs (language processing units) and mass production of CIS (image sensors) for a new customer remain on track, so we believe the company's medium- to long-term growth trajectory is unchanged. We expect the share price to trend upward as new product orders from customers become visible and the company joins the OSAT (outsourced semiconductor assembly and test) value chain."

Doosan Tesna's third-quarter results are expected to fall short of market expectations. Revenue is forecast at KRW 77 billion, down 8.8% from the same period a year earlier, while operating profit is projected to fall 37% to KRW 3.3 billion. "In addition to the seasonal off-season for mobile CIS and SoC (system-on-chip) demand, the effects of front-loaded production of ADAS (advanced driver assistance system) chips in the previous quarter are expected to make a decline in the utilization rate unavoidable," Kim said.

The company is looking to rebound in the fourth quarter. Kim said, "Doosan Tesna's results are expected to improve starting in the fourth quarter, supported by a recovery in ADAS volumes, an improvement in mobile seasonality, and the start of new LPU mass production." LPU equipment setup is scheduled to be completed this month, with mass production set to begin in November. Some revenue is expected to be reflected in the fourth quarter, with the full-year impact coming in 2027. In March 2027, Doosan Tesna is expected to set up equipment for a CIS test line serving a North American customer, with mass production potentially beginning as early as April.

"Doosan Tesna is also expected to conduct wafer testing for next-generation ADAS chips that the customer plans to begin mass production of in the second quarter of 2027," Kim said. "In addition to LPUs, CIS and next-generation ADAS chips, demand for testing memory controllers, which are currently showing notable growth, is also expected to remain solid."

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