SCREEN Holdings (7735.T): Conference call: Some upside potential for 2H guidance, but low margin growth phase

Research evidence excerpt

SCREEN Holdings (7735.T): Conference call: Some upside potential for 2H guidance, but low margin growth phase

Goldman Sachs SCREEN Holdings (7735.T)

China would be a positive from the perspective of its market share. Regarding a large

project for a Chinese DRAM customer (sales of c.¥20 bn) for which sales recognition was

pushed back from FY3/26 to FY3/27, SCREEN is negotiating to book the sales on a

shipment basis without installing the equipment. However, as this would result in a

partial refund to the customer, the project is awaiting approval from the Chinese

government (guidance assumes sales recognition in 1H).

Demand from global customers

The company highlighted that, compared to initial guidance, Taiwanese foundry demand

is firmer, and that, compared to FY3/26, it expects sales to US memory customers and

North American IDM customers to increase. In particular, SCREEN explained that its

share of deliveries to US memory customers in particular is higher than its global share

for cleaning equipment, and therefore that the benefits from investment expansion at

Taiwanese and US sites could be substantial. The company also mentioned that it is

receiving inquiries related to Terafab, and while aspects such as delivery location, scale,

and timing remain fluid, it currently sees the possibility of booking sales during FY3/28.

Also, regarding equipment for panel-level packaging (PLP), while the benefits for

cleaning equipment are limited, the company noted it has direct imaging systems and

slit-type coaters in its lineup (including coating equipment for 300 mm square CoPoS). It

said sales for the two products combined in FY3/26 were in the mid-single-digit billions

of yen.

Price Target Risks and Methodology - SCREEN Holdings