[Edaily Reporter Kim Hyung-il ] KIWOOM Securities projected that while Systems Technology Incorporated(039440)has continued to experience weak earnings this year due to capital expenditures focused on transition investments by semiconductor clients, a full-scale earnings rebound is expected to begin next year as demand for new fab investments and high-bandwidth memory (HBM) back-end process equipment expands.

On the 11th, Oh Hyun-jin, an analyst at KIWOOM Securities, estimated Systems Technology Incorporated’s revenue for this year at 331.2 billion won and operating profit at 14.3 billion won. While revenue is expected to increase by 1% year-over-year, operating profit is projected to decline by 28%. In the first half of this year, revenue totaled 146.3 billion won, down 15% year-over-year, and operating profit fell 69% to 3.3 billion won.

Systems Technology Incorporated is a semiconductor and display equipment manufacturer that supplies Central Chemical Supply Systems (CCSS)—high-purity chemical delivery systems—as well as wet process (Wet System) equipment such as cleaning, etching, developing, and reflow systems. Since utility systems such as CS CORPORATION experience large-scale demand during the early stages of new fab construction, whether clients invest in new production facilities is critical. However, the company’s benefits have been limited recently as major semiconductor clients have focused on retrofitting existing facilities rather than building new fabs. Results from the power semiconductor heat dissipation component manufacturing equipment business, which the company entered at the end of last year, are also being delayed.

Nevertheless, Systems Technology Incorporated is expected to see quarterly earnings improvement starting in the second half of the year, driven by its order backlog. As of the end of the second quarter, the order backlog stood at 214.3 billion won, a 69% increase compared to the same period last year. KIWOOM Securities anticipates that earnings will begin to recover in the third quarter as the secured orders are recognized as revenue.

Next year, growth is expected to accelerate as semiconductor companies ramp up investment in new fabs. With the upcoming installation of equipment at major production facilities—such as SamsungElectronics’ P5 and SK hynix’s P&T7—Systems Technology Incorporated’s equipment orders and revenue recognition are expected to increase. In particular, the expansion of High-Bandwidth Memory (HBM) processes is cited as an additional positive factor, as it is generating demand for utility equipment not only in front-end processes but also in back-end processes.

Securing overseas clients and the performance of wet process equipment are also areas worth noting. Micron is planning to expand its production capacity in Japan, following its expansion in Singapore. For reflow equipment, the company is pursuing customer diversification by targeting outsourced semiconductor back-end (OSAT) providers, and positive results are also expected for FC-BGA developers and display back-end cleaning equipment. KIWOOM Securities analyzed that revenue growth in the wet process equipment segment will also contribute to improved company-wide profitability.

KIWOOM Securities forecasts Systems Technology Incorporated’s revenue and operating profit for next year at 498.8 billion won and 43.5 billion won, respectively. This represents a 51% increase in revenue and a 205% increase in operating profit compared to the previous year. Analyst Oh stated, “Next year, semiconductor companies’ investments in new fabs will gain momentum, and demand for HBM back-end utility equipment will also expand,” adding, “Since our earnings estimates are based primarily on orders with high visibility, further growth is possible depending on the performance of new business ventures.”