[Click e-Stock] "DMS Moves Beyond No. 1 in Display Cleaning into Glass Substrates... Earnings Rebound Next Year"

DMS, a specialist in display wet-process equipment, is expected to secure new growth drivers through a recovery in its existing display business and an expansion of its glass substrate equipment business. Analysts say the company’s earnings and corporate value will improve together as it expands into the next-generation semiconductor packaging market, building on cleaning technology that has kept it No. 1 in the global wet cleaner market for about 20 years.

DMS maintains a market share of about 50% in the global display wet cleaner market, led by its flagship high-density cleaner (HDC). Its cost and delivery competitiveness, supported by its production subsidiary in Weihai, China, and its domestic R&D capabilities have enabled it to maintain supply relationships with major Chinese panel makers, including BOE, CSOT and HKC.

After securing large-scale equipment orders this year from major customers, including CSOT and HKC, DMS's display equipment order backlog has grown to about KRW 170 billion. Hanyang Securities forecast that, taking into account additional orders and delivery schedules, display segment revenue alone will reach about KRW 200 billion in 2027.

The glass substrate business is seen as a next-generation growth driver. Glass substrates are next-generation substrates designed to meet the needs of increasingly high-density AI semiconductors, and major domestic companies are accelerating preparations for mass production. However, actual mass production requires not only technology to form microscopic through-holes but also precision cleaning technology to remove particles and chemical residues generated during processing.

DMS is extending to glass substrates the technology it has accumulated over about 20 years of developing display cleaning equipment. It is building an equipment portfolio that can handle everything from pre- and post-TGV cleaning required in the glass substrate manufacturing process to chemical mechanical polishing (CMP) and cleaning after subsequent processing.

Precision cleaning is particularly important for glass substrates, as even microscopic contamination or residue can lead to defects in subsequent plating. Hanyang Securities said DMS can apply its existing technology because both display panels and glass substrates require chemical treatment, cleaning, rinsing, drying and particle control on glass. It also cited the prospect of higher prices and profitability for glass substrate equipment compared with existing display equipment as a positive factor.

Hanyang Securities forecast DMS's consolidated revenue for 2027 at KRW 235 billion, up 52.7% from estimated revenue of KRW 153.9 billion this year. It projected that the company would swing to an operating profit of KRW 23.2 billion from an operating loss of KRW 1.6 billion this year. The operating margin is also expected to improve from negative 1.0% this year to 9.9% next year.

Revenue related to glass substrates was estimated at about KRW 30 billion to KRW 35 billion in 2027. Although it could vary depending on customers' mass-production investments and the range of equipment they adopt, given that glass substrate equipment offers higher added value than existing display equipment, it could contribute to improved profitability, the brokerage said.

The company's shareholder return policy was also cited as a factor that could prompt a reassessment of its corporate value. DMS repurchased shares worth a total of KRW 13 billion this year and canceled 386,100 treasury shares acquired last August. It currently holds about 1.27 million treasury shares, equivalent to 5.7% of its issued shares. The company has announced a policy of using about 30% of its consolidated net income for dividends and share repurchases and cancellations through 2030.

Lee Junseok, an analyst at Hanyang Securities, said, "2027 is expected to mark a turning point beyond a simple earnings recovery, as the global No. 1 display cleaning company makes the transition to a semiconductor wet-process equipment company."

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