KB Securities initiated coverage on PSK (stock code 319660) with a 'Buy' rating and target price of 280,000 won on July 7, projecting the semiconductor equipment maker will benefit from prolonged global semiconductor manufacturers' capital expenditure expansion. Analyst Lee Chang-min forecasts PSK will achieve 27% compound annual growth rate in revenue and 34% CAGR in operating profit over the next three years, driven by diversified global customer base across DRAM, NAND, and foundry applications. The semiconductor equipment investment cycle is expected to strengthen and extend as major memory customers plan to open new large-scale fabs from 2027, creating structural upside for PSK's long-term performance.
KB Securities Projects 27% Revenue CAGR Through Diversified Customer Base
Lee Chang-min of KB Securities stated PSK will fully absorb benefits from the stronger and more prolonged front-end investment cycle compared to the past, based on diversified global customers across all application areas. The target price was calculated using discounted cash flow (DCF) methodology with weighted average cost of capital (WACC) of 10.13% and perpetual growth rate of 3.95%. The target price implies 12-month forward price-to-earnings ratio of 44.6 times and price-to-book ratio of 10.3 times, representing 53.6% upside potential from the closing price on July 3.
KB Securities analyzed the core of PSK's profit growth as prolonged benefits from the full-scale expansion of global semiconductor manufacturers' capital expenditure. The analyst explained PSK is expected to receive comprehensive benefits from expansion across all fronts, as the company holds diversified global customers across DRAM, NAND, and foundry applications while all semiconductor customers show aggressive investment intentions through continued capex increases and fab timeline reductions. The analyst added that semiconductor equipment investment is projected to unfold actively for an extended period as major memory customers' new large-scale fabs (P5, Y1, ID1, etc.) open from 2027, and the structural upward profit trajectory significantly exceeding past cycles is expected to be prolonged.
The analyst stated the possibility of expanding sales to overseas customers with relatively superior profitability is expected to further strengthen PSK's profit capacity, and when considering the possibility of reflexive benefits from geopolitical factors, the company's global number one market dominance is expected to become more solid.
PSK 2026 Revenue Forecast at 678.7 Billion Won with Record Operating Margin
KB Securities projected PSK's 2026 revenue at 678.7 billion won, representing 48% year-over-year growth, and operating profit at 184.6 billion won, representing 109% increase. The operating profit margin is expected to reach 27.2%, achieving record-high performance. The analyst stated new equipment sales from expansion investment in addition to conversion investment by memory customers are projected to drive performance growth, and step-by-step growth with increasing quarterly performance intensity is expected.
FAQ
What target price did KB Securities set for PSK on July 7?
KB Securities initiated coverage on PSK with a 'Buy' rating and target price of 280,000 won on July 7, calculated using DCF methodology with WACC of 10.13% and perpetual growth rate of 3.95%, implying 53.6% upside potential from the closing price on July 3.
What are KB Securities' revenue and profit projections for PSK in 2026?
KB Securities projected PSK's 2026 revenue at 678.7 billion won (48% year-over-year growth) and operating profit at 184.6 billion won (109% year-over-year increase), with operating profit margin reaching a record 27.2%.
