[Edaily Reporter PARK MIN ] On the 14th, SKSecurities maintained its target price of 230,000 won and “Buy” investment rating for TES CO., LTD.(095610), noting that the company is likely to exceed consensus estimates for the second half of the year when considering its order backlog. Based on the previous day’s closing price, TES CO., LTD.’s stock price stood at 145,000 won.

Lee Dong-ju, an analyst at SKSecurities, said in a report published that day, “The trend of accumulating order backlog is a key trigger for the stock price.” He added, “We maintain our view of expanding the weighting in equipment for the entire production process, and among these companies, we maintain our ‘Top Pick’ rating for the company.”

TES CO., LTD.’s second-quarter revenue reached 123.7 billion won, up 27% from the previous quarter and 51% year-over-year. Operating profit stood at 26 billion won, an increase of 17% quarter-over-quarter and 28% year-over-year. This was driven by increased DRAM shipments to SamsungElectronics’ P4 and SK hynix’s M15X compared to the first quarter, as well as higher equipment sales related to investments in the NAND V8 transition.

However, profitability fell short of securities firms’ estimates. The operating profit margin was weighed down by the impact of product mix shifts resulting from increased shipments of ARC and general-purpose equipment, as well as a rise in one-time costs such as R&D expenses and provisions for warranty repairs. The second-quarter operating profit margin stood at 21.0%.

Nevertheless, the trend in new orders remains positive. Following 145.5 billion won in new orders in the first quarter of this year, TES CO., LTD. secured 282.3 billion won in new orders in the second quarter. Second-quarter new orders nearly doubled compared to the previous quarter, and the order backlog exceeded 200 billion won at the end of the second quarter.

Analyst Lee Dong-ju stated, “Most of these orders are expected to be recognized as revenue within the year, and when considering orders secured in the second half, there is significant room for the market to raise its expectations for annual earnings.”

In particular, expanded memory investments by SamsungElectronics and SK hynix are expected to bolster second-half earnings. While orders for SamsungElectronics’ P4 and PH4 and SK hynix’s M15X are projected to maintain a strong momentum in the third quarter, investments related to SamsungElectronics’ Xi’an and V9 facilities in the NAND sector are also expected to continue in the second half.

SKSecurities also noted that there has been a very strong positive correlation between TES CO., LTD.’s stock price and its order backlog over the past decade. The analysis suggests that if the trend of a cumulative increase in the order backlog—rather than a mere temporary rise in orders—continues, it could become a key factor in shifting the direction of the stock price.

SKSecurities raised its forecast for TES CO., LTD.’s revenue this year to 491 billion won, a 6.5% increase from its previous projection. The operating profit forecast was revised upward by 1.9% to 107 billion won, representing levels 6.0% and 4.9% higher than the market consensus, respectively.

Earnings growth is also expected to continue next year. SKSecurities forecasts TES CO., LTD.’s 2027 revenue at 638 billion won and operating profit at 161 billion won. Compared to this year, revenue is projected to increase by approximately 30% and operating profit by approximately 50%. The operating profit margin is also estimated to improve from 21.9% this year to 25.2% in 2027.