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Earnings to improve on higher ASP

Earnings to improve on higher ASP

For 4Q23, we expect DE&T to report revenue of W39.4bn (+151% YoY) and operating profit of W5.3bn (turning to profit YoY), supported by higher ASP. We raised our 4Q23 revenue and operating profit forecasts by 25% and 32%, respectively, reflecting the recognition of previously delayed orders. For 2024, we forecast revenue at W143.2bn (+21% YoY) and operating profit at W15.8bn (+363% YoY; OP margin of 11%), which are 31% and 43% lower than our previous estimates, respectively. We revised down our estimates due to major customers’ slower-than-expected capacity expansion and final acceptance test (FAT)-related expenses (partly offsetting the effects of stronger ASP).

Investment points

Key investment points for DE&T include: 1) likely order wins for anode laser notching equipment and revenue expansion on steady order intake; and 2) margin improvements on ASP hikes (resulting from supplies to the GM2 plant).