Shinhan Investment Corp. raised its target price for Hanamaterials from 58,000 won to 83,000 won on July 22, citing expectations for increased demand for key components and improved profitability due to a recovery in the semiconductor market. The firm maintained its 'buy' rating.
Analyst Oh Gang-ho stated, "With the semiconductor market improving, demand for key components such as silicon carbide (SiC) and rings is expected to rise, making 2026 a year of performance growth. Given the growth trend demonstrated in the first quarter, we anticipate entering a phase of stair-step growth."
He added, "The strength of the semiconductor components is closely tied to the operational rates and capital investments of our clients, and we expect profitability to improve based on the competitiveness of products like silicon (Si) and SiC."
Oh noted that first-quarter sales increased by 59% year-on-year, while operating profit surged by 144%. He estimates that second-quarter operating profit will reach 23.4 billion won, a 176% increase compared to the same period last year. "Considering the performance trends, expectations for stair-step growth are expanding," he said.
He also mentioned that the operational rate for silicon components rose from 56% in the first quarter of last year to 80% in the first quarter of this year, and is expected to reach 85-90% in the second half of the year. "Given the product upgrades and expanding demand, there are sufficient expectations for capacity expansion," he analyzed.
Furthermore, he projected that operating profit for 2026 will reach 94.4 billion won, an 89% increase from the previous year, raising the previous estimate by 32%. He anticipates that increased demand and improved operational rates due to the recovery in NAND and DRAM semiconductor markets will drive performance growth.
He added, "The price-to-earnings ratio (PER) based on expected performance in 2026 is 14 times, which is below the historical average of 16.6 times. As the growth potential for 2026 becomes more apparent, we expect an increase in stock price levels."
* This article has been translated by AI.
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