DS Investment & Securities maintained its "buy" rating and target price of 1.5 million won for Doosan (000150.KS) on Tuesday, saying uncertainties over funding for the company's acquisition of SK Siltron have been resolved.
Doosan recently signed a price return swap (PRS) agreement using 11.7 million shares of Doosan Robotics as collateral. The deal will raise approximately 947.7 billion won, reducing Doosan's stake in Doosan Robotics from 68% to 50%. The company said it has no plans for additional share sales.
"Combining the funds raised with Doosan's existing cash and cash equivalents of 1.27 trillion won, available funds are estimated at more than 2.16 trillion won," DS Investment analyst Kim Soo-hyun said in a report. "This capital will likely be used to acquire the 70.6% controlling stake in SK Siltron."
Kim noted that based on the reported enterprise value of 5 trillion won for Siltron, subtracting net debt of approximately 2.5 trillion won leaves an estimated equity value of about 2.5 trillion won. Even with a control premium, the total equity value would likely be between 2.5 trillion won and 3 trillion won, the analyst said.
Acquiring 70.6% of that stake would require just over 2 trillion won, effectively eliminating concerns about additional funding measures such as treasury stock utilization or rights offerings, according to the report.
DS Investment also gave high marks to SK Siltron's business structure. The company's major customers include Samsung Electronics (005930.KS) at approximately 27% and SK hynix (000660.KS) at about 26%, providing a stable demand base centered on the world's top memory chipmakers. The firm has maintained annual EBITDA of more than 600 billion won even during semiconductor industry downturns.
"SK Siltron is not a business where profits fluctuate significantly with short-term market conditions," Kim said. "It's a business model that maintains structurally high EBITDA margins of over 30% based on fixed customers and recurring demand."
Silicon carbide (SiC) wafers in particular offer both high unit prices and margins, pointing to significant profitability improvements ahead, the analyst added.
SK Siltron is reportedly conducting facility expansions worth more than 3 trillion won at its SiC wafer plants in Gumi, South Korea, and Michigan, United States. The Gumi plant's production capacity is expected to double around 2027, while the Michigan facility will expand more than tenfold from current levels. This could lift SK Siltron's annual EBITDA from the current 600 billion won level to more than 1 trillion won over the long term, according to DS Investment.
"Given the high average selling prices and margin structure of SiC wafers, the SK Siltron acquisition will contribute to Doosan's medium- to long-term value enhancement," the brokerage said, maintaining its target price of 1.5 million won.
