KOSDAQSemiconductors095610

Tesco

₩178,200▼ 3.10%2026-10-02 close

Market Cap

₩3.4T

Turnover

₩41.8B

Volume

230K

Shares out.

19.4M

PER

32.4×

PBR

5.6×

EPS

₩4,527

Dividend Yield

0.58%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩850 per share · Prices as of the 2026-10-02 close

Report overview

Memory Capex Upturn Meets a Margin Test

TES swung back from a 2023 operating loss to consecutive revenue and profit expansion through 2025 and the first half of 2026, and the next phase now hinges on new-tool qualifications and the durability of customer capex.

1
In 2025 the company posted revenue of KRW 351.1bn and operating profit of KRW 57.8bn for a 16.5% operating margin, extending the profit recovery that followed the 2023 operating loss of KRW 5.9bn (-4.0% margin).
2
Operating margin rose to 22.8% in 1Q26 and 21.0% in 2Q26, above the 15-16% range of prior years, while net profit exceeded operating profit in both quarters.
3
The core products are front-end tools such as PECVD and gas phase etch and cleaning systems, and revenue is highly geared to domestic memory makers' capex.
4
Equipment supply contracts with SK hynix continued through 2026; disclosed orders from January 1 to May 21 totalled KRW 148.2bn, up 58.4% year on year.
5
The key medium-term variables are approval of new tools (BSD, Low-K PECVD) that broaden the mix from NAND toward DRAM and non-memory, and the timing of the hybrid bonding transition.

Business structure

TES is a KOSDAQ-listed maker of front-end semiconductor equipment, and it has been described as a company whose earnings improved as device makers expanded investment and domestic equipment share rose, lifting demand for PECVD and gas phase etch and cleaning tools.

Sales are centred on tool supply to domestic memory makers; in May 2026 the company disclosed a KRW 21.53bn semiconductor equipment supply contract with SK hynix, with payment terms of 90% on delivery and 10% on setup completion.

The product mix was historically NAND-heavy: Samsung Securities noted in an October 2025 report that the NAND revenue share had been maintained at above 60% through 2023. The customer base has gradually broadened.

The same report explained that the company began shipping tools to a Greater China DRAM maker from late 2023, and that in 2024, as those shipments ramped, reliance on domestic memory makers narrowed to the mid-80% range.

On the new-product axis, the company said at an October 2025 exhibition that it was co-developing BSD (Back Side Deposition) and Low-K PECVD tools with Samsung Electronics and SK hynix, that both had been delivered in small volumes, and that after development is complete and qualification testing is done they could potentially replace incumbent overseas tools.

Samsung Securities also mentioned that two new tools were undergoing qualification targeting the next-generation DRAM 1c node. In the adjacent back-end space, it is confirmed that Hanmi Semiconductor is developing a hybrid bonder through technical cooperation with domestic equipment firms including TES.

The competitive set is framed against domestic front-end peers such as Eugene Technology, Jusung Engineering, Wonik IPS, KCTech and PSK Holdings, while in deposition and cleaning it also competes with global majors on selected steps.

Ultimately the business outcome depends on customer fab investment and on how quickly new platforms capable of displacing incumbent overseas tools win approval.

Earnings trend

Quarterly revenue · Operating profit

₩82.1B₩20.4B25Q2₩67.6B₩8.4B25Q3₩117B₩12.8B25Q4₩97.2B₩22.2B26Q1₩123.7B₩26B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩358B₩55.9B2022₩146.9B-₩5.9B2023₩240.1B₩38.5B2024₩351.1B₩57.8B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩82.1B	₩20.4B	24.8%
2025Q3	₩67.6B	₩8.4B	12.5%
2025Q4	₩117B	₩12.8B	10.9%
2026Q1	₩97.2B	₩22.2B	22.8%
2026Q2	₩123.7B	₩26B	21.0%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩358B	₩55.9B	₩46.8B	15.6%	15.2%	9.7%
2023	₩146.9B	-₩5.9B	₩1.6B	−4.0%	0.5%	7.7%
2024	₩240.1B	₩38.5B	₩42.7B	16.0%	12.9%	15.3%
2025	₩351.1B	₩57.8B	₩56.9B	16.5%	14.5%	24.4%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

This is a company with wide earnings swings.

From 2022 revenue of KRW 357.9bn and operating profit of KRW 55.8bn (15.6% margin), it fell to 2023 revenue of KRW 146.9bn and an operating loss of KRW 5.8bn (-4.0% margin), then recovered to 2024 revenue of KRW 240.0bn and operating profit of KRW 38.4bn (16.0%), and 2025 revenue of KRW 351.1bn with operating profit of KRW 57.8bn (16.5%).

Net profit attributable to owners was KRW 56.9bn in 2025 while operating cash flow reached KRW 82.4bn, exceeding net profit, which suggests smooth cash conversion.

On the balance sheet, end-2025 equity was KRW 391.7bn against liabilities of KRW 95.7bn for a debt-to-equity ratio of 24.4%, higher than 7.7% in 2023 and 15.3% in 2024 but still low in absolute terms.

Quarterly, margins compressed from 2Q25 revenue of KRW 82.0bn and operating profit of KRW 20.3bn (24.8% margin) to 3Q25 revenue of KRW 67.5bn with KRW 8.4bn (12.5%) and 4Q25 revenue of KRW 116.9bn with KRW 12.7bn (10.9%).

On the 4Q margin squeeze, Hana Securities explained in a January 2026 report that its estimates assumed one-off costs including the disposal of KRW 7.5bn of treasury shares for employee share bonuses and partial year-end incentive payments.

Into 2026, 1Q revenue was KRW 97.2bn with operating profit of KRW 22.2bn (22.8%) and 2Q revenue KRW 123.6bn with KRW 26.0bn (21.0%), taking first-half revenue to KRW 220.9bn and operating profit to KRW 48.2bn, above the prior-year first half (revenue KRW 166.5bn, operating profit KRW 36.6bn).

In both quarters net profit attributable to owners (KRW 24.5bn in 1Q, KRW 34.0bn in 2Q) exceeded operating profit, implying non-operating contributions whose composition should be checked in the semi-annual filing.

Over the most recent four quarters (3Q25 to 2Q26), revenue, operating profit and net profit attributable to owners aggregate to roughly KRW 405.4bn, KRW 69.4bn and KRW 80.7bn, a trajectory already above the company's previous annual records.

Industry analysis

End demand is tightly linked to AI investment. Major media reported that surging AI chip demand has pushed Samsung Electronics and SK hynix into aggressive capex to expand HBM and next-generation DRAM capacity, creating a favourable environment for front-end equipment supplier TES.

On the new-fab axis, commentary has pointed to how capex at Samsung's Pyeongtaek P4 and SK hynix's Cheongju M15X moving into full swing has built expectations for wider front-end tool supply.

Order flow in test and back-end also hints at the cycle's temperature: according to Hanwha Investment & Securities, DI Corp signed five inspection-equipment contracts worth KRW 142.3bn with Samsung Electronics over June-July, while YIK signed two contracts worth KRW 255.2bn over June-August.

The direction and pace of technology transition, however, remain fluid. The industry expects hybrid bonding to become mainstream from 16-layer HBM4E at the earliest or 20-layer HBM5 at the latest, with the view that the generation right after Samsung's and SK hynix's HBM4 ramp will require the shift.

On the other hand, an overseas outlet recently reported that hybrid bonding is in high-volume production on logic but has been "freshly postponed on memory".

On competitive positioning, Samsung Securities noted in its October 2025 report that TES may carry relatively lower DRAM leverage than Wonik IPS or Eugene Technology, and could therefore underperform in phases where DRAM drives growth.

In short, even within a cycle that is broadly supportive for Korean equipment makers, TES's relative performance depends on how far its mix shifts toward DRAM and non-memory.

Outlook

The confirmed order flow was supportive through the first half. The company disclosed six supply contracts totalling KRW 148.22bn from January 1 to May 21, 2026, up 58.4% from KRW 93.55bn in the same period a year earlier.

Beyond that, on June 5 it disclosed a KRW 21.2bn semiconductor equipment supply contract with SK hynix, equal to 6.04% of recent annual revenue, running to January 15, 2027.

As a customer-side demand indicator, it is worth noting reports that SK hynix entered HBM4 mass production in the second quarter of 2026 and plans to expand output in the second half.

On shareholder returns and strategy, the company disclosed a corporate value enhancement plan on March 23, 2026, setting out goals of diversifying technology platforms, expanding the product portfolio, broadening markets and customers, and strengthening IR, with action items including continued R&D investment, stronger overseas marketing and more domestic and overseas non-deal roadshows.

The same filing stated that the 2025 payout ratio was 26.5% and total 2025 dividends were KRW 15.074bn, up 43.2% from KRW 10.525bn in 2024. New-product timing remains opaque: the company did not comment on when development of BSD and Low-K PECVD would be completed or when qualification testing would occur.

On hybrid bonding, given that Hanmi Semiconductor's hybrid bonder launch is expected in 2027, any earnings contribution from that cooperation may fall in a later window.

In sum, near-term visibility comes from the order backlog, while the scale of medium-term growth is decided by new-tool approvals and the mix shift toward DRAM and non-memory.

Valuation

PER

32.4×

PBR

5.6×

ROE

19.6%

EPS

₩4,527

BPS

₩26,053

Dividend per share

₩850

The starting point for valuation is that the profit trajectory turned from the 2023 loss to profit and the recovery extended through 2025 and the first half of 2026.

The current price-to-earnings multiple sits well above the band in which this stock has historically traded; for reference, Samsung Securities stated in an October 2025 report that it had calculated a level of 15 times as one standard deviation above the five-year average 12-month forward P/E.

The price-to-book multiple likewise represents a sizeable premium to net assets, and it is worth noting that internally computed figures and the Korea Exchange's published figures differ somewhat depending on the calculation basis.

On dividends, with a 2025 payout ratio of 26.5%, the total distribution grew alongside earnings, but where share-price gains outpace dividend growth the resulting yield mechanically declines.

The bullish framing is that trailing four-quarter profit has surpassed prior peak levels; the bearish framing is the track record of equipment revenue swinging sharply by quarter with customer investment timing.

Whether the current multiple is warranted therefore depends on whether operating margins in the 20% range and the order flow persist beyond the second half of 2026, and this report does not make that determination on the reader's behalf.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Signs of a step-up in the margin structure

Operating margins were 15.6% in 2022 and 16.5% in 2025, but rose to 22.8% in 1Q26 and 21.0% in 2Q26. Higher margins at comparable revenue levels suggest a possible change in product and customer mix.

Samsung Securities judged in an October 2025 report that mix improvement from new tool launches and overseas customer wins could support operating margins above 20%, rather than the mid-to-high teens.

Whether this improvement is a quarterly artefact or structural, however, requires confirmation over additional quarters.

Cumulative disclosed orders running above last year

Supply contracts disclosed from January 1 to May 21, 2026 totalled six deals worth KRW 148.2bn, up 58.4% from KRW 93.5bn a year earlier. A further KRW 21.2bn contract was disclosed on June 5, running to January 15, 2027.

Because equipment revenue is recognised around delivery and setup, such contract backlog forms the base for coming quarters' sales. Conversely, if new disclosures dry up, visibility diminishes with them.

Attempted expansion through new tool platforms

The company said it is co-developing BSD and Low-K PECVD tools with Samsung Electronics and SK hynix, that both have shipped in small volumes, and that after development and qualification testing they could potentially replace incumbent overseas tools.

Samsung Securities mentioned that two new tools are in qualification targeting the next DRAM 1c node. In addition, the fact that Hanmi Semiconductor is developing a hybrid bonder in cooperation with domestic equipment firms including TES points to a touchpoint with next-generation packaging. Approval timing and adoption volumes, however, have not been disclosed.

Bear factors

Wide quarterly swings

Revenue over the past five quarters moved from KRW 82.0bn to 67.5bn, 116.9bn, 97.2bn and 123.6bn, while operating margin ranged from 24.8% down to 10.9%. On an annual basis the swing was more than twofold, from KRW 357.9bn in 2022 to KRW 146.9bn in 2023 and back to KRW 351.1bn in 2025.

This reflects revenue being driven by the timing of customer capex execution, making it hard to infer a trend from one or two quarters. The operating loss recorded in 2023 is a reference point for what a downturn phase can look like.

Customer and product concentration

Disclosed supply contracts repeatedly involve SK hynix, so shifts in one customer's investment schedule can translate directly into earnings volatility.

Samsung Securities noted that reliance on domestic memory makers narrowed to the mid-80% range in 2024, but cautioned this could be temporary given the timing gap between the Greater China customer's and domestic makers' investment cycles.

On the product side, the history that NAND accounted for more than 60% of revenue through 2023 means dependence on the NAND investment cycle persists. Actual progress on diversification needs to be verified through customer and product mix disclosures in the annual report.

One-off costs and technology transition uncertainty

In 4Q25, despite revenue rising to KRW 116.9bn, operating profit was only KRW 12.7bn (10.9% margin). Hana Securities explained that its estimates assumed one-off items including the treasury-share bonus disposal and year-end incentives.

Such items can recur at year-end, making them a variable in annual margin estimates. On technology transition, reports indicate hybrid bonding is in high-volume production on logic but has been postponed on memory, leaving room for related expectations to be realised later than assumed.

Risk factors

Cycle and demand risk

Memory capex execution can shift materially earlier or later with industry conditions. The 2023 episode, when revenue fell to less than half the prior year and the company posted an operating loss, illustrates this sensitivity.

The current backdrop is one in which surging AI chip demand has Samsung Electronics and SK hynix expanding HBM and next-generation DRAM capacity, but if data-centre investment slows, equipment orders can adjust with a lag. A turn in the investment cycle is a variable no single supplier controls.

Competition and technology substitution risk

Front-end deposition and cleaning is a market where global majors and domestic suppliers compete side by side. Samsung Securities noted that relatively lower DRAM leverage than Wonik IPS or Eugene Technology could leave growth lagging in DRAM-led phases.

If new tools fail qualification or adoption volumes fall short, the mix-improvement scenario could be delayed. Because the company has not disclosed development completion or qualification test timelines, outsiders cannot easily quantify progress.

Financial and accounting recognition risk

In both 1Q26 and 2Q26, net profit attributable to owners (KRW 24.5bn and KRW 34.0bn) exceeded operating profit (KRW 22.2bn and KRW 26.0bn). This implies non-operating items contributed to earnings, and if those relate to volatile lines such as FX or financial income, their repeatability must be assessed separately.

The debt-to-equity ratio rose from 7.7% in 2023 to 24.4% in 2025; the absolute level remains low but the direction warrants monitoring. Because equipment revenue is recognised in line with delivery and setup progress, customer setup delays can push recognition into later quarters.

What to watch next

Late October to mid-November 2026
Third-quarter 2026 results. The point is to check whether the 20%-plus operating margin seen in the first half holds, and whether a revenue air pocket like that in 3Q25 recurs.
During the fourth quarter of 2026
Whether additional single-sales and supply contract disclosures with SK hynix and Samsung Electronics emerge. Whether the pace behind the KRW 148.2bn cumulative total for January to May, up 58.4% year on year continues into the second half is leading information on 2027 revenue visibility.
Around February 2027
Fourth-quarter and full-year 2026 results. Given that one-off items such as the treasury-share bonus disposal and year-end incentives were flagged for 4Q25, this allows a comparison of whether year-end costs again compressed margins.
Around March 2027
The annual report and any updated corporate value enhancement plan. This is the point to review progress on the goals of platform and customer diversification alongside any change from the 26.5% payout ratio recorded for 2025.
Ongoing through the first half of 2027
Announcements of qualification pass and production adoption for BSD and Low-K PECVD, plus cooperation progress tied to the Hanmi Semiconductor hybrid bonder launch expected in 2027. Confirmed revenue contribution from new tools would change the basis of the product-mix debate.

Overall view

TES passed through a trough of KRW 146.9bn in revenue and a KRW 5.8bn operating loss in 2023, then recovered to revenue of KRW 240.0bn and KRW 351.1bn with operating profit of KRW 38.4bn and KRW 57.8bn in 2024 and 2025.

In the first half of 2026 revenue was KRW 220.9bn and operating profit KRW 48.2bn, lifting the operating margin into the 20% range, and trailing four-quarter profit sits on a trajectory above the previous annual peak.

On orders, cumulative disclosed contracts for January to May rose 58.4% year on year, and in March 2026 the company disclosed a corporate value enhancement plan covering platform diversification and broader markets and customers.

On the other side sit the volatility of quarterly revenue swinging between KRW 67.5bn and KRW 123.6bn, dependence on NAND and specific customers, the possibility of recurring year-end one-off costs, and reports that hybrid bonding adoption in memory has been postponed.

With the profit recovery now reflected, the valuation multiple stands above this stock's historical trading band, leaving the burden of confirming that earnings support that level.

The next checkpoints are margin durability in third-quarter results, the second-half order disclosure flow, and the outcome of new-tool qualification tests. This report is for informational purposes and contains no buy or sell recommendation and no target price.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.