[Edaily Reporter Shin Ha-yeon ] On the 11th, Shinhan Investment Securities assessed that HAESUNG DS(195870)has entered a phase of earnings growth driven by the simultaneous expansion of its lead frame and package substrate businesses. The firm maintained its “Buy” rating and raised its target price by 13% from 80,000 won to 90,000 won. This represents an upside potential of 59.9% compared to the previous trading day’s closing price of 56,300 won.

Oh Kang-ho, an analyst at Shinhan Investment Securities, stated, “The company has entered a phase of earnings growth in 2026,” adding, “Profitability is expected to improve rapidly due to the simultaneous growth of lead frames and package substrates, and with its valuation remaining attractive, a stock price rebound is anticipated.”

HAESUNG DS’s second-quarter revenue reached 211.1 billion won, a 34.1% increase year-over-year. Operating profit surged 203.7% to 24.9 billion won, exceeding the market consensus of 22.5 billion won by 10.7%. Compared to the previous quarter, revenue rose 11.9% and operating profit increased 126.4%.

By product, both lead frames and package substrates showed steady growth. Second-quarter revenue from lead frames reached 164 billion won, while package substrates recorded 47.1 billion won. These figures represent year-over-year increases of 33% and 37%, respectively.

Analyst Oh explained, “Revenue by product category showed that lead frames and package substrates increased by 33% and 37%, respectively, compared to the same period last year,” adding, “Lead frames achieved their highest quarterly revenue ever.”

Within the lead frame segment, the automotive sector is estimated to account for 62% of sales, while IT and other sectors account for 38%. The share of IT and other sectors expanded by 1.7 percentage points compared to the previous quarter. For package substrates, the effects of price increases for major customers and the stabilization of raw material prices were evident.

Analyst Oh noted, “For printed circuit boards, the effect of unit price increases for major customers and the stabilization of raw material prices drove improved profitability.” Consequently, the company’s second-quarter operating profit margin rose to 11.8%, up 6.6 percentage points year-over-year and 6.0 percentage points quarter-over-quarter.

The company is expected to continue its upward trend in performance during the second half of the year. Shinhan Investment Securities estimated third-quarter revenue and operating profit at 239 billion won and 33.7 billion won, respectively. The projected operating profit margin is 14.1%. For the fourth quarter, the firm forecast revenue of 240.2 billion won and operating profit of 30.9 billion won.

On an annual basis, the firm expects this year’s revenue to reach 878.9 billion won—a 34.5% increase from the previous year—and operating profit to rise 116.1% to 100.5 billion won. The operating profit margin is also projected to improve by 4.3 percentage points, from 7.1% last year to 11.4% this year.

Analyst Oh stated, “Operating profit this year is projected to reach 100.5 billion won, a 116% increase year-over-year, indicating strong growth,” adding, “The company has entered a phase of accelerated growth due to improving market conditions, and regarding printed circuit boards, it is also considering the introduction of production lines utilizing new manufacturing processes.” He continued, “Driven by a mix of high-value-added products and expanded sales, the operating profit margin is expected to rise to 11.4%, a 4.3 percentage point increase from the previous year.”

Along with earnings growth, attractive valuation was also cited as an investment highlight. Shinhan Investment Securities raised its earnings per share (EPS) forecast for this year by 13% from its previous estimate to 5,259 won. The target price-to-earnings ratio (PER) was set at 17.2x, representing a 10% premium over the peak PER recorded during the 2019–2020 period—a time of earnings improvement prior to the COVID-19 pandemic.

Analyst Oh stated, “Given the upward revision to earnings, the stock’s valuation is attractive relative to peers,” adding, “A further upward revision to the valuation is entirely possible if demand for lead frames stabilizes, raw material price volatility eases, and the share of high-value-added package substrates expands.”

He continued, “The company has demonstrated its growth through the announcement of strong quarterly earnings,” adding, “The share of package substrates in total revenue is estimated to reach approximately 25% by 2026, and growth in the semiconductor segment along with the expansion of high-value-added product sales are expected to determine the stock’s upward trajectory.”