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Expanding to North American customers

Recommendation and valuation

We maintain our Buy rating and target price of W46,000 on Jusung Engineering. We derived our target price by applying a P/E of 20.8x to our 2024F EPS of W2,259. Valuations appear stretched across the semiconductor equipment industry, with global peers trading at an average P/E of around 40x. For our valuation of Jusung Engineering, we applied a 20% discount to the 2024F P/E of Applied Materials (26x), which operates in the same market segments (semiconductor, display, and solar cell equipment) and is trading at the lowest valuation among global peers.

We applied a 20% discount to reflect the relatively limited applications of Jusung Engineering’s semiconductor equipment (mainly DRAM and foundries in greater China). That said, we note that the company is planning to release logic and solar PV equipment; in our view, success in these segments would justify a valuation on par with global equipment players.

Market conditions and investment points

From 2Q24, the company will begin shipments of semiconductor equipment to domestic DRAM makers and Chinese customers. Furthermore, in 3Q24, we should see visible progress related to equipment for North American logic customers and new equipment for North American memory customers.

Of note, given Jusung Engineering’s expertise in atomic layer deposition (ALD), we believe that its through glass via (TGV) equipment is designed to form copper seed layers on glass substrates. More conventional methods based on physical vapor deposition (PVD) face challenges such as weak adhesion and difficulty accessing deep holes, thus complicating wiring formation. As such, we think Jusung Engineering’s TGV equipment has the potential to play a pivotal role in the glass substrate ecosystem. We also expect the company to deliver meaningful results in solar PV equipment. Given the recent rise in global solar PV demand, the company should soon receive new orders for panel equipment from Europe. Additionally, we see a high likelihood that the company will ship testing equipment for next-generation panel structures (e.g., perovskite).

For 2024, we expect the company to record revenue of W400bn, supported by domestic and Chinese memory customers. In 2025, revenue will likely expand to W500bn, driven by the addition of logic and solar PV customers.















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