SK Securities on the 13th maintained its "buy" rating on semiconductor equipment manufacturer TES (KOSDAQ: 095610) while raising its target price from 150,000 won to 230,000 won.
Analyst Lee Dong-ju at SK Securities estimates second-quarter revenue of 115.1bn won, up 18% quarter-on-quarter and 40% year-on-year, with operating profit of 28.8bn won, up 30% quarter-on-quarter and 41% year-on-year. The operating margin is forecast to improve to 25.2%, compared with the previous quarter.
The principal driver behind the target price upgrade is a sharp rise in the order backlog. TES's outstanding orders reached a record 145.5bn won at the end of the first quarter. Given that domestic delivery lead times typically run to two to three months, the bulk of this backlog is expected to feed through into second-quarter results.
In the second half of the year, equipment installations are anticipated to accelerate at Samsung Electronics' P4 fabs (phases PH4 and PH2) and SK Hynix's M15X facility. By 2027, large-scale capital expenditure at Samsung's P5 and SK Hynix's Y1 fabs is expected to drive capacity additions of up to twice this year's level.
Momentum beyond DRAM is also becoming more pronounced. Signs have emerged that NAND investment is resuming, centred on fabs in Xi'an and Dalian, China. TES is also set to begin supplying its BSD equipment for DRAM applications in the second half, a segment that is projected to account for 10% of the company's revenue next year.
SK Securities forecasts full-year 2026 revenue of 461.0bn won and operating profit of 105.0bn won. The new target price is derived by applying a target price-to-earnings ratio of 30 times to the projected 2027 earnings per share of 7,732 won. Based on the current share price of 177,700 won (as of 10th July), this implies upside potential of 29.4%.