[Edaily Reporter Shin Ha-yeon ] On the 15th, Meritz Securities projected that Park Systems Corp.(140860)will continue to see earnings growth in the second half of the year, driven by increased shipments of industrial atomic force microscopes (AFMs) and an expansion in its order backlog. The firm maintained its “Buy” rating but lowered the target price by 6% from 350,000 won to 330,000 won.

Kim Dong-gwan, an analyst at Meritz Securities, stated, “Despite headwinds from exchange rates in the second half, the impact on earnings will be limited thanks to a robust order backlog,” adding, “The sharply increased order backlog is expected to be recognized sequentially as revenue starting in the fourth quarter through 2027.”

Meritz Securities forecasts Park Systems Corp.’s third-quarter revenue at 67.8 billion won, a 49% increase year-over-year, and operating profit at 18.5 billion won, up 114%. The operating profit margin is estimated at 27.3%. The firm believes profitability will improve as the cost burden—which was concentrated in the first half—eases, while increased shipments of industrial AFMs drive revenue growth.

Analyst Kim explained, “Since costs related to new equipment development and customer support were concentrated in the first half, SG&A expenses are expected to stabilize at a lower level starting in the third quarter.” He added, “While a decline in unit prices in won terms is inevitable due to the high proportion of export revenue, the volume of new orders exceeding previous expectations is expected to offset the impact of the price decline.” Park Systems Corp.’s cumulative export revenue accounted for 90% of total revenue in the first half of this year.

He particularly highlighted the sharp increase in the order backlog. As of the disclosure on the 14th of last month, Park Systems Corp.’s order backlog totaled 102.3 billion won. New purchase orders (POs) in July and August following the second quarter were also assessed to be at a healthy level.

Analyst Kim stated, “By region, while mainland China and Taiwan led order growth in the first half, it is estimated that orders from the U.S., South Korea, and Japan are coming in sequentially in the second half.”

The expansion of AFM applications through new equipment was also cited as a growth driver. Sales of Hybrid White Light Interferometer (Hybrid WLI) equipment to North American customers are expected to increase, and the supply of TSH equipment to foundry customers’ advanced packaging lines is also projected to rise.

Analyst Kim assessed, “The expansion of Hybrid WLI equipment sales to North American customers and TSH equipment sales to foundry customers’ advanced packaging lines is expected to continue from the second half of this year through 2027,” adding, “We are entering a phase where the portfolio is expanding from front-end metrology to advanced packaging, which directly translates into an increase in the total addressable market (TAM) over the medium to long term.”

Production capacity is also expected to be sufficient to meet rising demand for the time being. The company explained that by utilizing idle space within existing facilities, it can secure production capacity estimated at approximately 300 billion won, enabling it to meet demand through 2027. Additionally, it was reported that the company is reviewing plans for further capacity expansion following the issuance of bonds with warrants (BW) last May.

Annual revenue for this year is projected to reach 247.1 billion won, a 20.2% increase from the previous year, while operating profit is expected to rise 25.0% to 52.7 billion won. For next year, revenue is forecast to reach 303.5 billion won and operating profit 68.4 billion won, representing increases of 22.8% and 29.6%, respectively.

Analyst Kim emphasized, “The growing importance of measurement processes—driven by increased investment in miniaturization by Chonbang customers and the rising difficulty of improving yield rates—continues to unfold.” He added, “Corporate value is also expected to follow an upward trend in the medium to long term, as the expansion of AFM applications in both front-end and back-end processes is translating into increased orders.”